SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Event: February 5, 1998
United International Holdings, Inc.
(Exact Name of Registrant as Specified in Charter)
Delaware 0-21974 84-1116217
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification #)
incorporation)
4643 South Ulster Street, Suite 1300, Denver, CO. 80237
(Address of Principal Executive Office)
(303) 770-4001
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events
- --------------------
On January 30, 1998, United International Holdings, Inc. (the "Registrant"
or the "Company") offered for sale $1.375 billion principal amount at maturity
of 10 3/4% Senior Secured Discount Notes due 2008 (the "Senior Notes"), in a
private offering under Rule 144A of the Securities Act of 1933, as amended (the
"Offering"), resulting in gross proceeds to the Company of approximately $812.2
million.
The Company used approximately $530.9 million of the proceeds from the
Offering to complete a tender offer for the Company's existing 14% Senior
Secured Discount Notes due 1999 (the "1999 Notes") (the "Tender Offer") and the
consent solicitation that the Company conducted concurrently therewith. The
Company commenced the Tender Offer on January 7, 1998, and the Tender Offer
expired on February 4, 1998, with over 99.8% of the 1999 Notes being validly
tendered. The Company subsequently purchased $0.5 million principal amount at
maturity of the 1999 Notes on the open market, leaving approximately $0.5
million outstanding as of February 28, 1998.
The remaining 1999 Notes will mature on November 15, 1999, and share a
security interest with the Senior Notes in the stock and intercompany notes to
the Company of United International Properties, Inc. ("UIPI"). UIPI is a wholly
owned subsidiary of the Company, which currently holds all of the Company's
assets, except for the Company's interest in UIH Europe, Inc. ("UIH Europe").
UIH Europe, a wholly owned subsidiary of the Company formerly known as Joint
Venture, Inc., holds the Company's interest in United Pan-Europe Communications,
N.V., formerly known as United and Philips Communications B.V.. Holders of the
Senior Notes and the remaining outstanding 1999 Notes share a first-priority
security interest in the stock and intercompany notes to the Company of UIPI.
However, only holders of the Senior Notes have a first-priority security
interest in the stock and intercompany notes to the Company of UIH Europe. All
of the Company's operations are conducted through UIPI and UIH Europe.
Pursuant to a registration rights agreement between the Company and the
initial purchasers of the Senior Notes, the Company agreed to file with the
Securities and Exchange Commission (the "Commission") within 45 days after the
date of issuance of the Senior Notes, February 5, 1998, (the "Issue Date"), a
registration statement under the Securities Act of 1933, as amended, relating to
an exchange offer for the Senior Notes, and agreed to use its reasonable efforts
to cause such registration statement to become effective within 135 days after
the Issue Date. Such registration statement on Form S-4 was filed with the
Commission on March 3, 1998 (the "S-4").
As the holders of the Senior Notes hold first-priority security interests
in the stock and intercompany notes to the Company of UIPI and UIH Europe, and
because such securities of UIPI and UIH Europe are deemed to constitute a
substantial portion of the collateral for the Senior Notes, financial statements
are required to be filed with the Commission for both UIPI and UIH Europe. UIPI
financial statements have been previously filed in connection with the
Registrant's periodic filings on Form 10-K. Joint Venture, Inc. financial
statements are included herein, and will be incorporated by reference into the
S-4.
Item 7. Financial Statements and Exhibits
- ------------------------------------------
Financial Statements:
<TABLE>
<CAPTION>
Joint Venture, Inc.
<S> <C>
Report of Independent Public Accountants.......................................................................... F-1
Balance Sheets as of February 29, 1996 and February 28, 1997, and November 30, 1997 (Unaudited)................... F-2
Statements of Operations for the Years Ended February 28, 1995, February 29, 1996 and February 28, 1997,
and for the Nine Months Ended November 30, 1996 (Unaudited) and November 30, 1997 (Unaudited)................. F-3
Statements of Stockholder's Equity for the Years Ended February 28, 1995, February 29, 1996 and
February 28, 1997, and for the Nine Months Ended November 30, 1997 (Unaudited)................................ F-4
Statements of Cash Flows for the Years Ended February 28, 1995, February 29, 1996 and February 28, 1997,
and for the Nine Months Ended November 30, 1996 (Unaudited) and November 30, 1997 (Unaudited)................. F-5
Notes to the Financial Statements................................................................................. F-6
</TABLE>
1
<PAGE>
Exhibits:
- --------
4.1 Supplemental Indenture dated as of February 5, 1998, between the Company
and Firstar Bank of Minnesota, N.A.(the "Trustee") supplementing the
Indenture dated as of November 23, 1994, between the Company and the
Trustee.
4.2 Supplemental Indenture dated as of February 5, 1998, between the Company
and the Trustee supplementing the Indenture dated as of November 22, 1995,
between the Company and the Trustee.
10.1 Indenture dated as of February 5, 1998, between the Company and the
Trustee.*
10.2 Pledge Agreement dated as of February 5, 1998, between the Company and
Morgan Stanley & Co. Incorporated (the "Collateral Agent").
10.3 First Amendment to the Amended and Restated Pledge Agreement dated as of
February 5, 1998, between the Company and the Collateral Agent, amending
the Amended and Restated Pledge Agreement dated as of November 22, 1995.
10.4 Note Purchase Agreement dated as of January 30, 1998, among Donaldson,
Lufkin & Jenrette Securities Corporation, Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Morgan Stanley Dean Witter, TD Securities (USA) Inc.
(the "Initial Purchasers"), and the Company.
10.5 Registration Rights Agreement dated as of February 5, 1998, between the
Company and Initial Purchasers.
23.1 Consent of Independent Public Accountants - Arthur Andersen LLP
- ------------------
* Incorporated by reference from the Company's Registration Statement on Form
S-4 (File No. 333-47245), dated March 3, 1998.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf of the
undersigned thereunto duly authorized.
UNITED INTERNATIONAL HOLDINGS, INC.
DATE: March 10, 1998 By: /s/ J. Timothy Bryan
----------------------------------
J. Timothy Bryan
Chief Financial Officer
3
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Joint Venture, Inc.:
We have audited the accompanying balance sheets of Joint Venture, Inc. (a
Delaware Corporation) as of February 29, 1996 and February 28, 1997 and the
related statements of operations, stockholder's equity and cash flows for the
years ended February 28, 1995, February 29, 1996 and February 28, 1997. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Joint Venture, Inc. as of
February 29, 1996 and February 28, 1997, and the results of its operations and
its cash flows for the years ended February 28, 1995, February 29, 1996 and
February 28, 1997 in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Denver, Colorado
May 26, 1997
F-1
<PAGE>
<TABLE>
<CAPTION>
JOINT VENTURE, INC.
BALANCE SHEETS
(Stated in thousands, except share and per share amounts)
November 30,
February 29, February 28, 1997
1996 1997 (Unaudited)
------------ ----------- -----------
<S> <C> <C> <C>
ASSETS
Investment in affiliated company, accounted for under the equity
method .................................................................... $131,125 $99,174 $55,941
Other assets ................................................................. -- 352 754
-------- ------- -------
Total assets .......................................................... $131,125 $99,526 $56,695
======== ======= =======
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities
Accounts payable and accrued liabilities .................................. $ 23 $ 24 $ 24
-------- ------- -------
Total liabilities ..................................................... 23 24 24
-------- ------- -------
Stockholder's equity
Common Stock, $0.01 par value, 1,000 shares authorized, 100,
100 and 100 shares issued and outstanding, respectively ................. -- -- --
Contributed capital ....................................................... 154,197 159,241 163,709
Cumulative translation adjustments ........................................ (3,758) (11,047) (19,192)
Accumulated deficit ....................................................... (19,337) (48,692) (87,846)
-------- ------- -------
Total stockholder's equity ............................................ 131,102 99,502 56,671
-------- ------- -------
Total liabilities and stockholder's equity ............................ $131,125 $99,526 $56,695
======== ======= =======
The accompanying notes are an integral part of these financial statements.
</TABLE>
F-2
<PAGE>
<TABLE>
<CAPTION>
JOINT VENTURE, INC.
STATEMENTS OF OPERATIONS
(Stated in thousands, except share and per share amounts)
For the Nine Months Ended
For the Years Ended -----------------------------
------------------------------------------ November 30, November 30,
February 28, February 29, February 28, 1996 1997
1995 1996 1997 (Unaudited) (Unaudited)
------------ ------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Management fee income from related parties..... $ 768 $ 283 $ -- $ -- $ --
Corporate general and administrative expense... (4,148) (1,422) (4,693) (3,520) (4,066)
-------- --------- --------- --------- ---------
Net operating loss........................ (3,380) (1,139) (4,693) (3,520) (4,066)
Equity in losses of affiliated company......... -- (15,559) (24,662) (16,226) (35,088)
-------- --------- --------- --------- ---------
Net loss.................................. $ (3,380) $ (16,698) $ (29,355) $ (19,746) $ (39,154)
======== ========= ========= ========= =========
Net loss per common share...................... $(33,800) $(166,980) $(293,550) $(197,460) $(391,540)
======== ========= ========= ========= =========
Weighted-average number of common shares
Outstanding............................... 100 100 100 100 100
======== ========= ========= ========= =========
The accompanying notes are an integral part of these financial statements.
</TABLE>
F-3
<PAGE>
<TABLE>
<CAPTION>
JOINT VENTURE, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
(Stated in thousands, except share amounts)
Retained
Common Stock Cumulative Earnings
------------------- Contributed Translation (Accumulated
Shares Amount Capital Adjustments Deficit) Total
------ ------ ----------- ----------- ------------ -----
<S> <C> <C> <C> <C> <C> <C>
Balance, February 28, 1994................ 100 $ -- $ 653 $ -- $ 741 $ 1,394
Capital contributions from parent, net... -- -- 3,354 -- -- 3,354
Net loss.................................. -- -- -- -- (3,380) (3,380)
--- ---- -------- -------- -------- ---------
Balance, February 28, 1995................ 100 -- 4,007 -- (2,639) 1,368
Capital contributions from parent, net.... -- -- 150,190 -- -- 150,190
Cumulative translation adjustments........ -- -- -- (3,758) -- (3,758)
Net loss.................................. -- -- -- -- (16,698) (16,698)
--- ---- -------- -------- ---------- --------
Balance, February 29, 1996................ 100 -- 154,197 (3,758) (19,337) 131,102
Capital contributions from parent, net... -- -- 5,044 -- -- 5,044
Cumulative translation adjustments........ -- -- -- (7,289) -- (7,289)
Net loss.................................. -- -- -- -- (29,355) (29,355)
--- ---- --------- -------- --------- --------
Balance, February 28, 1997................ 100 -- 159,241 (11,047) (48,692) 99,502
Capital contributions from
parent, net (Unaudited)................ -- -- 4,468 -- -- 4,468
Cumulative translation
adjustments (Unaudited)................. -- -- -- (8,145) -- (8,145)
Net loss (Unaudited)...................... -- -- -- -- (39,154) (39,154)
--- ---- -------- -------- -------- -------
Balance, November 30, 1997
(Unaudited)........................... 100 $ -- $163,709 $(19,192) $(87,846) $56,671
=== ==== ======== ======== ======== =======
The accompanying notes are an integral part of these financial statements.
</TABLE>
F-4
<PAGE>
<TABLE>
<CAPTION>
JOINT VENTURE, INC.
STATEMENTS OF CASH FLOWS
(Stated in thousands)
For the Nine Months Ended
For the Years Ended ----------------------------
----------------------------------------- November 30, November 30,
February 28, February 29, February 28, 1996 1997
1995 1996 1997 (Unaudited) (Unaudited)
------------ ------------ ------------ ----------- -------------
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net loss........................................ $(3,380) $(16,698) $(29,355) $(19,746) $(39,154)
Adjustments to reconcile net loss to net cash
flows from operating activities:
Equity in losses of affiliated company....... -- 15,559 24,662 16,226 35,088
Management fee receivables collected by
parent and accounted for as a
dividend to parent......................... (768) (283) -- -- --
Allocation of general, administrative and
other expenses accounted for as a net
contribution of capital by parent.......... 4,148 1,422 4,693 3,520 4,066
------- -------- -------- -------- --------
Net cash flows provided by (used in)
operating activities......................... -- -- -- -- --
------- -------- -------- -------- --------
Cash flows from investing activities:
Purchase of interest in affiliated company...... -- (78,200) -- -- --
------- -------- -------- -------- --------
Net cash flows used in investing activities..... -- (78,200) -- -- --
------- -------- -------- -------- --------
Cash flows from financing activities:
Cash contribution from parent................... -- 78,200 -- -- --
------- -------- -------- -------- --------
Net cash flows provided by financing
activities................................... -- 78,200 -- -- --
------- -------- -------- -------- --------
Increase (decrease) in cash and cash
equivalents.................................. -- -- -- -- --
------- -------- -------- -------- --------
Cash and cash equivalents, beginning of period.. -- -- -- -- --
------- -------- -------- -------- --------
Cash and cash equivalents, end of period........ $ -- $ -- $ -- $ -- $ --
======= ======== ======== ======== ========
Non-cash investing and financing activities:
Capital contributions from parent, net.......... $ 3,354 $ 71,990 $ 5,044 $ 3,520 $ 4,468
======= ======== ======== ======== ========
Initial investment in affiliated company:
Cash........................................... $ -- $ 78,200 $ -- $ -- $ --
Common Stock of parent company................. -- 50,000 -- -- --
Contribution of European and Israeli assets.... -- 22,242 -- -- --
------- -------- -------- -------- --------
Total investment........................ $ -- $150,442 $ -- $ -- $ --
======= ======== ======== ======== ========
The accompanying notes are an integral part of these financial statements.
</TABLE>
F-5
<PAGE>
JOINT VENTURE, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF FEBRUARY 29, 1996, FEBRUARY 28, 1997 AND NOVEMBER 30, 1997 (Unaudited)
AND FOR THE YEARS ENDED FEBRUARY 28, 1995,
FEBRUARY 29, 1996 AND FEBRUARY 28, 1997
AND THE NINE MONTHS ENDED NOVEMBER 30, 1996 (Unaudited)
AND NOVEMBER 30, 1997 (Unaudited)
(Monetary amounts stated in thousands)
1. ORGANIZATION AND BACKGROUND
Joint Venture, Inc., formerly known as United International Management,
Inc. (the "Company" or "JVI") was formed as a Delaware corporation in September
1989, for the purpose of developing, acquiring and managing European
multi-channel television, programming and telephony operations. The Company is a
wholly owned subsidiary of United International Holdings, Inc. ("UIH").
The following chart presents a summary of the Company's significant
investments in multi-channel television and telephony operations as of February
28, 1997.
********************************************************
* UIH *
********************************************************
*
100% *
*
********************************************************
* JVI *
********************************************************
*
50%(1) *
*
********************************************************
* United and Philips Communications, B.V. *
* ("UPC")(2) *
********************************************************
*
*
*
********************************************************
* Eurpoe *
* ------ *
* *
* Radio Public (Belgium) 100.0% *
* KTE (Eindhoven, The Netherlands) 100.0 *
* Norkabel (Norway) 100.0 *
* Intercabo (Portugal) 100.0 *
* Kabel Net (Czech Republic) 100.0 *
* Marne la Vallee (France) 99.5 *
* Telekable Group (Austria) 95.0 *
* Multi Canal (Romania) 90.0 *
* Tranavatel SRO (Slovak Republic) 75.0 *
* Janco (Norway)(3) 70.2 *
* Control Cable (Romania) 51.0 *
* A2000 (Amsterdam, The Netherlands) 50.0 *
* Kabelkom (Hungary) 47.0 *
* Melita Cable (Malta) 42.5 *
* Citecable (France) 30.0 *
* Santander (Spain) 25.0 *
* Tevel (Israel) 23.3 *
* Princess Holdings (Ireland) 20.0 *
* *
********************************************************
(1) In February 1997, UIH and Philips Media B.V. signed a letter of intent
which provided for UIH and/or UPC to acquire Philips' 50% interest in UPC,
except for ratable dilution caused by UPC's incentive option plan.
(2) In September 1996, UPC acquired 100% of UCI, a partnership which held
interests in Norkabel, Kabelkom and Swedish Cable. UPC sold Swedish Cable
in October 1996.
(3) In January 1997, UPC acquired a 70.2% interest in Janco, which serves the
city of Oslo. UPC has the right to acquire the remaining interest in Janco
in 2000.
F-6
<PAGE>
JOINT VENTURE, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
In July 1995, the Company and Philips Electronics B.V. ("Philips")
contributed their respective ownership interests in European and Israeli
multi-channel television systems to UPC. The Company and Philips each own a 50%
economic and voting interest in UPC and will continue to have equal board
representation so long as their share ownership is equal. Philips contributed to
UPC its 95% interest in cable television systems in Austria, its 100% interest
in cable television systems in Belgium and its minority interests in
multi-channel television systems in Germany, the Netherlands (Eindhoven) and
France. Immediately prior to the UPC transaction, UIH contributed to the Company
which in turn contributed to UPC its interests in multi-channel television
systems in Israel, Ireland, the Czech Republic, Malta, Norway, Hungary, Sweden
and Spain. In July 1995, A2000, a Dutch company owned 50% by Philips, acquired a
100% interest in existing cable television systems with non-exclusive licenses
in Amsterdam, the Netherlands and four surrounding municipalities. Philips then
transferred its 50% interest in A2000 to UPC. In September 1995, UPC acquired
the remaining 96.2% interest in Kabeltelevisie Eindhoven N.V. ("KTE"), the
Netherlands system formerly owned by the city of Eindhoven and certain local
housing authorities.
In February 1997, UIH and Philips entered into a letter of intent whereby
the Company and/or UPC would acquire from Philips their 50% equity interest in
UPC along with 3.17 million of UIH's Class A Common Shares currently held by
Philips. The purchase price for the acquisition of these two assets based on
exchange rates at that date was approximately $275 million. In addition, UPC
agreed to redeem certain debt securities owed to Philips in the approximate
amount of $155 million and agreed to issue to Philips a stock appreciation
right. The parties are currently working on definitive documentation for the
transaction, failing which the ownership of UPC will remain as currently
structured. Closing for the transaction, assuming the successful execution of
definitive documentation, is expected to occur during 1997.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
FOR THE YEARS ENDED FEBRUARY 28, 1995, FEBRUARY 29, 1996, AND FEBRUARY 28,
1997. The accompanying financial statements include the accounts of the Company,
including its investment in UPC. UPC has a calendar year end, compared to the
Company which has a fiscal year end of February 28 (February 29 in leap years).
The Company records its share of equity in income (losses) of UPC based on UPC's
calendar year end results, using the average exchange rates during the period.
Exchange rate fluctuations on recording the Company's investment in UPC from
period to period result in unrealized gains or losses referred to as translation
adjustments. These cumulative translation adjustments are recorded as a separate
component of stockholder's equity.
FOR THE NINE MONTHS ENDED NOVEMBER 30, 1996 AND 1997. The accompanying
interim financial statements are unaudited and include the accounts of the
Company, including its investment in UPC. In management's opinion, all
adjustments (of a normal recurring nature) have been made which are necessary to
present fairly the financial position of the Company as of November 30, 1997,
and the results of its operations for the nine months ended November 30, 1996
and 1997.
INVESTMENT IN AFFILIATED COMPANY, ACCOUNTED FOR UNDER THE EQUITY METHOD
For its investment in UPC, the equity method of accounting is used. Under
this method, the investment, originally recorded at cost, is adjusted to
recognize the Company's proportionate share of net earnings or losses of UPC,
limited to the extent of the Company's investment in UPC, including any debt
guarantees or other contractual funding commitments. The Company's share of net
earnings or losses of UPC includes the amortization of excess cost over net
tangible assets acquired. The Company's investment in UPC is summarized as
follows:
F-7
<PAGE>
JOINT VENTURE, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
<TABLE>
<CAPTION>
As of February 29, 1996
-----------------------------------------------------------------------------------------------------
Cumulative
Investment Cumulative Equity in Translation
in UPC(1) Losses of UPC Adjustments Total
---------- -------------------- ----------- --------
<S> <C> <C> <C>
$150,442 $(15,559) $(3,758) $131,125
</TABLE>
(1) The assets contributed to JVI by UIH and then to UPC were contributed at
net book value. The investment in UPC also includes cash contributed to UPC
of $78,200 and UIH common stock issued to Philips valued at approximately
$50,000 on the date of issuance.
<TABLE>
<CAPTION>
As of February 28, 1997
------------------------------------------------------------------------------------------------------
Cumulative
Investment Cumulative Equity in Translation
in UPC Losses of UPC Adjustments Total
---------- -------------------- ----------- -------
<S> <C> <C> <C>
$150,442 $(40,221) $(11,047) $99,174
</TABLE>
<TABLE>
<CAPTION>
As of November 30, 1997 (Unaudited)
------------------------------------------------------------------------------------------------------
Cumulative
Investment Cumulative Equity in Translation
in UPC Losses of UPC Adjustments Total
---------- -------------------- ----------- -------
<S> <C> <C> <C>
$150,442 $(75,309) $(19,192) $55,941
</TABLE>
As of February 29, 1996 and February 28, 1997, the Company had the
following differences related to the excess of cost over the net tangible assets
acquired included in the above table. Such differences are being amortized over
15 years.
<TABLE>
<CAPTION>
As of February 29, 1996 As of February 28, 1997
------------------------- --------------------------
Basis Accumulated Basis Accumulated
Difference Amortization Difference Amortization
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
UPC......................................... $29,636 $(1,287) $25,588 $(3,218)
</TABLE>
RECOVERABLE AMOUNTS OF TANGIBLE AND INTANGIBLE ASSETS
The carrying amount of all tangible and intangible assets are reviewed
periodically whenever events and circumstances indicate the carrying value of
the assets may exceed their recoverable amount. The recoverable amounts of all
tangible and intangible assets have been determined using net cash flows which
have not been discounted to their present values.
MANAGEMENT FEES
The Company and certain related parties were parties to management
agreements during the years ended February 28, 1995 and February 29, 1996
pursuant to which the Company agreed to perform certain administrative,
accounting, financial reporting and other services for these entities. In
conjunction with the formation of UPC in July 1995, these agreements were
contributed to UPC.
Income Taxes
The Company recognizes deferred tax assets and liabilities for the expected
future income tax consequences of transactions which have been included in the
financial statements or tax returns. Deferred tax assets and liabilities are
determined based on the difference between the financial statement and income
tax bases of assets and liabilities and carryforwards using enacted tax rates in
effect for the year in which the differences are expected to reverse. Net
deferred tax assets are then reduced by a valuation allowance for amounts which
are not expected to be realized.
F-8
<PAGE>
JOINT VENTURE, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
3. INVESTMENT IN UPC
On July 13, 1995, the Company completed the transaction with Philips
resulting in the formation of UPC. The Company and Philips each own 50% of UPC
and contributed to UPC their interests in their respective European and Israeli
multi-channel television systems, related programming services and their
European multi-channel television and programming development opportunities. The
Company also contributed $78,200 in cash to UPC and issued to Philips 3,169,151
shares of UIH Class A Common Stock having a value of $50,000 (at date of
closing). In addition, UPC issued to Philips $133,600 of convertible
subordinated pay-in-kind notes. Condensed financial information for UPC, stated
in U.S. dollars, is as follows:
<TABLE>
<CAPTION>
As of As of
December 31, September 30,
---------------------- ----------------
1995 1996 1997 (Unaudited)
-------- --------- ----------------
<S> <C> <C> <C>
CONDENSED CONSOLIDATED BALANCE SHEET DATA
Cash................................................................... $ 77,049 $ 24,487 $ 34,765
Property, plant and equipment, net.................................. 172,752 238,179 225,961
Intangible assets, net.............................................. 292,932 267,029 316,783
Other assets ....................................................... 146,597 123,261 118,478
-------- -------- --------
Total assets.................................................... $689,330 $652,956 $695,987
======== ======== ========
Accounts payable, accrued liabilities and current portion of
long-term debt.................................................... $350,569 $356,421 $401,323
Notes payable....................................................... 132,955 147,234 225,573
Minority interest................................................... 871 2,616 3,019
Shareholders' equity................................................ 204,935 146,685 66,072
-------- -------- --------
Total liabilities and shareholders' equity...................... $689,330 $652,956 $695,987
======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
For the Nine Months Ended
From Inception ----------------------------
(July 13, 1995) For the September 30, September 30,
through Year Ended 1996 1997
December 31, 1995 December 31, 1996 (Unaudited) (Unaudited)
----------------- ----------------- ------------- -------------
<S> <C> <C> <C> <C>
CONDENSED CONSOLIDATED INCOME STATEMENT DATA
Revenue.............................................. $ 62,300 $140,827 $103,270 $128,897
Operating, selling, general and administrative expenses (41,308) (91,501) (67,277) (91,375)
Depreciation and amortization........................ (26,259) (53,211) (40,117) (56,136)
-------- -------- -------- --------
Net operating loss.............................. (5,267) (3,885) (4,124) (18,614)
Interest, net........................................ (10,476) (32,655) (20,164) (44,401)
Equity in losses of investee companies, net.......... (10,062) (5,458) (3,077) (3,509)
Other................................................ (23) (1,560) 1,667 (478)
-------- -------- -------- --------
Net loss........................................ $(25,828) $(43,558) $(25,698) $(67,002)
======== ======== ======== ========
</TABLE>
4. INCOME TAXES
In general, a United States corporation may claim a foreign tax credit
against its federal income tax expense for foreign income taxes paid or accrued.
Because the Company must calculate its foreign tax credit separately for
dividends received from each foreign corporation in which the Company owns 10%
to 50% of the voting stock, and because of certain other limitations, the
Company's ability to claim a foreign tax credit may be limited, particularly
with respect to dividends paid out of earnings subject to a high rate of foreign
income tax. Generally, the Company's ability to claim a foreign tax credit is
limited to the amount of U.S. taxes the Company pays with respect to its foreign
F-9
<PAGE>
JOINT VENTURE, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
source income. In calculating its foreign source income, the Company is required
to allocate interest expense and overhead incurred in the United States between
its U.S. and foreign activities. Accordingly, to the extent U.S. borrowings are
used to finance equity contributions to its foreign subsidiaries, the Company's
ability to claim a foreign tax credit may be significantly reduced. These
limitations and the inability of the Company to offset losses in one foreign
jurisdiction against income earned in another foreign jurisdiction could result
in a high effective tax rate on the Company's earnings.
The Company accounts for income taxes on a separate company basis in
accordance with SFAS 109. The primary difference between taxable loss and net
loss for financial reporting purposes relates to accounting for equity in losses
of UPC. Any taxable loss generated by UPC does not flow through to the Company
for United States federal and state tax purposes. Accordingly, due to the
indefinite reversal of such amounts in future periods, no deferred tax asset has
been established for tax basis in excess of the Company's book basis
(approximately $50,750 and $82,723 at February 29, 1996 and February 28, 1997,
respectively).
The Company's United States tax net operating losses, calculated on a
separate company basis totaling approximately $8,471 at February 28, 1997,
expire beginning in 2004 through 2012. The significant components of the net
deferred tax asset are as follows:
<TABLE>
<CAPTION>
As of As of
February 29, February 28,
1996 Change 1997
------------ ------ ------------
Deferred Tax Asset
- ------------------
<S> <C> <C> <C>
Company's United States tax net operating loss
Carryforward.................................. $ 1,474 $ 1,830 $ 3,304
------- ------- -------
Deferred tax asset................................. 1,474 1,830 3,304
Valuation reserve.................................. (1,474) (1,830) (3,304)
------- ------- -------
Deferred tax asset, net............................ $ -- $ -- $ --
======= ======= +======
</TABLE>
The difference between income tax benefit provided in the financial
statements and the expected income tax benefit at statutory rates is reconciled
as follows:
<TABLE>
<CAPTION>
For the Years Ended
--------------------------------------------------
February 28, February 29, February 28,
1995 1996 1997
------------ ------------ ------------
<S> <C> <C> <C>
Expected income tax benefit at statutory rates............ $(1,318) $(6,512) $(11,448)
Tax effect of permanent and other differences:
Book/tax differences associated with foreign
equity investment losses.......................... -- 6,068 9,618
Valuation allowance related to net operating loss...... 1,318 444 1,830
------- ------- --------
Total income tax benefit........................... $ -- $ -- $ --
======= ======= ========
</TABLE>
5. UNAUDITED EVENTS SUBSEQUENT TO DATE OF AUDITORS' REPORT
UPC ACQUISITION
On December 11, 1997, UIH through JVI acquired Philips' interest in UPC,
thereby increasing its ownership through JVI to effectively 100% (subject to
certain employee equity incentive arrangements) (the "UPC Transaction"). In
addition to purchasing Philips' interest in UPC, as part of the UPC Transaction
at closing, (i) UPC purchased all of the 3,169,151 shares of Class A Common
F-10
<PAGE>
JOINT VENTURE, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
Stock of UIH held by Philips, (ii) UPC repaid to Philips the accreted amount of
UPC's 9.96% Series A and 10.03% Series B Pay-in-Kind Convertible Notes not
acquired directly by UIH and (iii) UPC made a payment to Philips of $7,500 in
lieu of issuing a previously negotiated stock appreciation right. In connection
with the UPC Transaction, UPC refinanced substantially all of its existing
consolidated debt.
The final purchase price was $425,200, comprised of $168,700 for the
purchase by the Company and repayment by UPC of UPC's Pay-in-Kind Convertible
Notes, $33,200 allocated to the purchase by UPC of 3,169,151 shares of UIH's
Class A Common Stock and $223,300 allocated to the purchase of Philips' interest
in UPC. The UPC Transaction was financed with (i) approximately NLG305,200
($151,500 as of December 11, 1997) drawn under a NLG1,100,000 nine-year bank
facility (the "Tranche A Facility"), (ii) approximately $111,200 of the $125,000
non-recourse Senior Secured Bridge Facility ("Tranche B Facility"), and (iii) an
approximately $162,500 cash investment by UIH.
OTHER
On February 25, 1998, the Company changed its name from Joint Venture, Inc.
to UIH Europe, Inc.
F-11
- --------------------------------------------------------------------------------
UNITED INTERNATIONAL HOLDINGS, INC.
$394,000,000
14% SENIOR SECURED DISCOUNT NOTES DUE 1999
SUPPLEMENTAL INDENTURE
Dated as of February 5, 1998
FIRSTAR BANK OF MINNESOTA, N.A.,
Successor Trustee
Supplementing the Indenture
dated as of November 23, 1994, between
United International Holdings, Inc. and
Firstar Bank of Minnesota, N.A., as successor trustee
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLE I. AMENDMENTS.................................................... 1
----------
Section 1.01 Definitions.................................... 1
Section 1.02 Deletion of Certain Sections................... 2
Section 1.03 Amendment to Section 4.10...................... 2
Section 1.04 Amendment to Section 4.18...................... 3
Section 1.05 Amendment to Section 6.01...................... 3
Section 1.06 Amendment to Section 10.01..................... 4
ARTICLE II. MISCELLANEOUS................................................. 5
-------------
Section 2.01 Original Indenture Confirmed and Ratified...... 5
Section 2.02 Severability................................... 5
Section 2.03 Counterpart Originals.......................... 5
Section 2.04 Table of Contents, Headings, etc............... 5
Section 2.05 Governing Law.................................. 5
i
<PAGE>
SUPPLEMENTAL INDENTURE dated as of February 5, 1998 (the "Supplemental
Indenture"), amending the Indenture dated as of November 23, 1994 (the "Original
Indenture") between United International Holdings, Inc., a Delaware corporation
(the "Company"), and Firstar Bank of Minnesota, N.A., as successor trustee (the
"Trustee"), pursuant to which the Company issued $394,000,000 principal amount
at maturity of its 14% Senior Secured Discount Notes due 1999 (the
"Securities").
The parties entered into the Original Indenture to provide for the
issuance of the Securities and related matters.
Pursuant to section 9.02 of the Original Indenture, the consent of
holders of more than the required percentage of outstanding principal amount of
the Securities has been obtained for the amendment of the Original Indenture.
The Company and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders of the Securities:
ARTICLE I.
AMENDMENTS
----------
Section 1.01 DEFINITIONS.
(a) The following definitions shall be added to the Original
Indenture.
"New Notes" means the Company's 10 3/4% Senior Secured Discount
Notes due 2008 issued pursuant to an Indenture dated as of February 5,
1998 between the Company and the Trustee.
"Original Indenture" means the Indenture dated as of November 23,
1994 between the Company and the Trustee.
"Supplemental Indenture" means this Supplemental Indenture dated
as of February 5, 1998 between the Company and the Trustee.
(b) The following definition in the Original Indenture shall be
amended to read as follows:
"Indenture" means the Original Indenture and the Supplemental
Indenture, as further amended or supplemented from time to time.
(c) Section 1.01 of the Original Indenture shall be amended by
deleting in their entirety the following definitions, including any reference to
them in the Original Indenture: Consolidated Cash Flow, Consolidated Debt,
Consolidated Debt to Consolidated Cash Flow Ratio, Consolidated Invested Equity
Capital, Consolidated Net Income, Disqualified Stock, Existing Indebtedness,
Guarantee, Net Income, New Equity Offering Proceeds, Non-Recourse Debt,
Permitted Refinancing Indebtedness, Project Financing, Related Business,
<PAGE>
Subordinated Indebtedness, Total Market Capitalization, Total Market Value of
Equity, Weighted Average Life to Maturity.
(d) Section 1.02 of the Original Indenture shall be amended by
deleting in their entirety the following definitions, including any reference to
them in the Original Indenture: Affiliate Transaction, incur, Joint Venture
Offer, Joint Venture Payment and Unrestricted Investment.
Section 1.02 DELETION OF CERTAIN SECTIONS. The following sections of
the Original Indenture are hereby deleted in their entirety: Sections 4.05,
4.07, 4.08, 4.09, 4.11, 4.12, 4.13, 4.15, 4.20, 5.01, and 5.02.
Section 1.03 AMENDMENT TO SECTION 4.10. Section 4.10 of the Original
Indenture is hereby deleted in its entirety and the following new Section 4.10
shall be inserted in lieu thereof:
SECTION 4.10. ASSET SALES
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in an Asset Sale unless (i) the Company (or the
applicable Restricted Subsidiary, as the case may be) receives consideration at
the time of such Asset Sale at least equal to the fair market value (evidenced
by a resolution of the Board of Directors) of the assets sold or otherwise
disposed of and (ii) at least 85% of the consideration therefor received by the
Company or such Restricted Subsidiary is in the form of cash; PROVIDED, HOWEVER,
that the amount of (A) any liabilities of any Restricted Subsidiary as shown on
such Restricted Subsidiary's most recent balance sheet or in the notes thereto
(other than liabilities that are incurred in connection with, or in
contemplation of, such Asset Sale) that are assumed by the transferee of any
such assets and (B) any notes or other obligations received by the Company or
such Restricted Subsidiary from such transferee that are immediately converted
by the Company or such Restricted Subsidiary into cash (to the extent of the
cash received), shall be deemed to be cash for purposes of this paragraph.
Within 12 months after any Asset Sale, other than an Asset Sale of all
or part of the Company's direct or indirect ownership interest in JVI (or any
successor thereto), the Company (or the applicable Restricted Subsidiary, as the
case may be) may apply the Net Proceeds from such Asset Sale to make a Permitted
Investment (other than an Investment in Cash Equivalents). Any Net Proceeds from
an Asset Sale that are not applied within 12 months after such Asset Sale to
make a Permitted Investment as provided in the first sentence of this paragraph
and all Net Proceeds from an Asset Sale of all or part of the Company's direct
or indirect interests in JVI (or any successor thereto), less any amounts
required by the terms of any instrument governing any other Indebtedness ranking
senior or PARI PASSU in right of payment to the Senior Notes to be applied to
the repurchase or offer to repurchase by the Company of such other Indebtedness
as a result of any such Asset Sale, will be deemed to constitute "EXCESS
PROCEEDS," PROVIDED that, in the case of an Asset Sale by a Restricted
Subsidiary of the Company that is not a Wholly Owned Restricted Subsidiary of
the Company, only the Company's Pro Rata Portion of such Net Proceeds shall
constitute Excess Proceeds. Pending final application of any Net Proceeds of an
2
<PAGE>
Asset Sale to a Permitted Investment (other than Cash Equivalents) or to an
Asset Sale Offer, such Net Proceeds may only be invested in Cash Equivalents.
When the aggregate amount of Excess Proceeds exceeds $5 million, the Company
will be required to make an offer to all Holders to purchase the maximum
principal amount of Senior Notes that may be purchased out of the Excess
Proceeds (an "ASSET SALE OFFER"), at an offer price in cash equal to 100% of the
Accreted Value thereof as of the date of purchase (the "ASSET SALE PAYMENT"),
pursuant to the provisions of Section 3.01 hereof. The Asset Sale Offer shall
remain open for a period of 20 Business Days following its commencement and no
longer, except to the extent that a longer period is required by applicable law
(the "ASSET SALE OFFER PERIOD"). No later than five Business Days after the
termination of the Asset Sale Offer Period (the "ASSET SALE PURCHASE DATE"), the
Company shall purchase the principal amount of Securities required to be
purchased pursuant to this Section 4.10. To the extent that the aggregate
Accreted Value of Senior Notes tendered pursuant to an Asset Sale Offer is less
than the Excess Proceeds to be applied to purchase Senior Notes, the Company may
use any remaining Excess Proceeds for any purpose permitted by the other
provisions of this Indenture. If the aggregate Accreted Value of Senior Notes
surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee will select the Senior Notes to be purchased on a pro rata basis. Upon
completion of each Asset Sale Offer, the amount of Excess Proceeds shall be
reset at zero.
Notwithstanding the foregoing, to the extent that the Company or any
of its Restricted Subsidiaries receives securities or other noncash property or
assets as proceeds of an Asset Sale, such securities and other noncash proceeds
will not be treated as Net Proceeds of an Asset Sale unless and until the
Company receives cash or Cash Equivalents from a sale, repayment, exchange,
redemption or retirement of, or extraordinary dividend or return of capital on,
such securities or other noncash property and then only to the extent of the
cash of Cash Equivalents received.
Section 1.04 AMENDMENT TO SECTION 4.18. Section 4.18 of the Original
Indenture is hereby deleted in its entirety and the following new Section 4.18
shall be inserted in lieu thereof:
SECTION 4.18 SUBSIDIARY STRUCTURE.
Notwithstanding anything in the Indenture to the contrary, the Company
shall not make any Investment in any Person, directly or indirectly, other than
through UIPI or JVI, which together shall be required to hold, directly or
indirectly, all Investments made by the Company or any of its Restricted
Subsidiaries after the date of this Indenture (except that the Company may hold
cash or Cash Equivalents in amounts necessary to meet payroll and other
operating expenses of the Company and JVI). In addition, (i) each of UIPI and
JVI shall at all times continue to be a direct Wholly Owned Restricted
Subsidiary of the Company and the Company will not have any other direct
Subsidiaries, (ii) neither UIPI nor JVI shall (although its Restricted
Subsidiaries and Restricted Affiliates may) incur Indebtedness, except
intercompany Indebtedness from UIPI or JVI to the Company that is pledged
pursuant to the Pledge Agreement, or issue any preferred stock, (iii) JVI shall
at all times be the direct beneficial and record owner of all of the Company's
direct and indirect interests in UPC other than those interests held or reserved
to be held (as of the Issue Date) through the foundation administering UPC's
employee equity incentive plan, (iv) neither JVI nor UIPI shall incur or suffer
3
<PAGE>
to exist any Lien on any of its assets other than Permitted Liens, and (v)
neither JVI nor UIPI shall consolidate or merge with or into any other Person.
Section 1.05 AMENDMENT TO SECTION 6.01. Section 6.01, subparagraph (b)
of the Original Indenture is hereby deleted its entirety and the following new
subparagraph (b) shall be inserted in lieu thereof:
"(b) [intentionally omitted]."
Section 1.06 AMENDMENT TO SECTION 10.01. Section 10.01 of the Original
Indenture is hereby deleted in its entirety and the following new Section 10.01
shall be inserted in lieu thereof:
SECTION 10.01 PLEDGE AGREEMENT
The due and punctual payment of the principal of or Accreted Value (as
applicable), and premium, if any, on the Securities, the Senior Notes and the
New Notes when and as the same shall be due and payable, whether at maturity, by
acceleration, repurchase or otherwise, and interest on the overdue principal or
Accreted Value (as applicable) of, and premium, if any, on the Securities, the
Senior Notes and the New Notes and performance of all other obligations of the
Company to the Holders of Securities and Senior Notes or the Trustee under this
Indenture and the Securities and the indenture governing the terms of the Senior
Notes and the New Notes, according to the terms hereunder or thereunder, shall
be secured as provided in the Pledge Agreement that the Company has entered into
simultaneously with the execution of this Indenture, as amended, concurrently
with the issuance of the New Notes. Each Holder of Securities by its acceptance
thereof, consents and agrees to the terms of the Pledge Agreement (including,
without limitation, the provisions providing for foreclosure and release of
Pledged Collateral) as the same may be in effect or may be amended from time to
time in accordance with its terms and authorizes and directs the Collateral
Agent to enter into the Pledge Agreement and to perform its obligations and
exercise its rights thereunder in accordance therewith. The Company shall
deliver to the Trustee copies of all documents delivered to the Collateral Agent
pursuant to the Pledge Agreement, and shall do or cause to be done all such acts
and things as may be necessary or proper, or as may be required by the
provisions of the Pledge Agreement, to assure and confirm to the Trustee and the
Collateral Agent the security interest in the Pledged Collateral contemplated
hereby, by the Pledge Agreement or any part thereof, as from time to time
constituted, so as to render the same available for the security and benefit of
this Indenture and of the Securities secured hereby and the indenture governing
the terms of the Senior Notes and the New Notes, according to the intent and
purposes herein expressed. The Company shall take, or shall cause its
Subsidiaries to take, upon request of the Trustee, any and all actions
reasonably required to cause the Pledge Agreement to create and maintain, as
security for the Obligations of the Company hereunder, a valid and enforceable
perfected first priority Lien in and on all Pledged Collateral, in favor of the
Collateral Agent for the benefit of the Holders of the Securities, the Senior
Notes and the New Notes, superior to and prior to the rights of all other third
Persons and subject to no Liens other than Permitted Liens.
4
<PAGE>
ARTICLE II
MISCELLANEOUS
Section 2.01 ORIGINAL INDENTURE CONFIRMED AND RATIFIED. Except as for
the changes provided herein, the Original Indenture and the Securities are in
all other respects hereby approved, ratified and confirmed and shall remain in
full force and effect in accordance with their terms.
Section 2.02 SEVERABILITY. In case any provision in this Supplemental
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 2.03 COUNTERPART ORIGINALS. The parties may sign any number of
copies of this Supplemental Indenture. Each signed copy shall be an original,
but all of them together represent the same agreement.
Section 2.04 TABLE OF CONTENTS, HEADINGS, ETC. The Table of Contents
and Headings of the Articles and Sections of this Supplemental Indenture have
been inserted for convenience of reference only, are not to be considered a part
of this Supplemental Indenture and shall in no way modify or restrict any of the
terms or provisions hereof.
Section 2.05 GOVERNING LAW. The internal laws of the State of New York
shall govern and be used to construe this Supplemental Indenture.
[Signature page follows]
5
<PAGE>
IN WITNESS WHEREOF, the parties have each caused this Supplemental
Indenture to be duly executed and delivered as of the dates set forth below.
Dated as of February 5, 1998 UNITED INTERNATIONAL HOLDINGS, INC.
By: /s/ J. Timothy Bryan
---------------------------------
J. Timothy Bryan
Chief Financial Officer
Attest:
/s/ Ellen P. Spangler (SEAL)
- -------------------------------------
Dated as of February 5, 1998 FIRSTAR BANK OF MINNESOTA, N.A.
as successor in interest to
AMERICAN BANK NATIONAL ASSOCIATION
Trustee
By: /s/ Frank P. Leslie, III
---------------------------------
Frank P. Leslie, III
Vice President
Attest:
/s/ Angela Weidell Labathe (SEAL)
- -------------------------------------
6
- --------------------------------------------------------------------------------
UNITED INTERNATIONAL HOLDINGS, INC.
$130,000,000
14% SENIOR SECURED DISCOUNT NOTES DUE 1999
SUPPLEMENTAL INDENTURE
Dated as of February 5, 1998
FIRSTAR BANK OF MINNESOTA, N.A.,
Successor Trustee
Supplementing the Indenture
dated as of November 22, 1995, between
United International Holdings, Inc. and
Firstar Bank of Minnesota, N.A., as successor trustee
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
-----------------
PAGE
----
ARTICLE I. AMENDMENTS.................................................... 1
----------
Section 1.01 Definitions.................................... 1
Section 1.02 Deletion of Certain Sections................... 2
Section 1.03 Amendment to Section 4.10...................... 2
Section 1.04 Amendment to Section 4.16...................... 3
Section 1.05 Amendment to Section 6.01...................... 3
Section 1.06 Amendment to Section 10.01..................... 4
ARTICLE II. MISCELLANEOUS................................................. 5
-------------
Section 2.01 Original Indenture Confirmed and Ratified...... 5
Section 2.02 Severability................................... 5
Section 2.03 Counterpart Originals.......................... 5
Section 2.04 Table of Contents, Headings, etc............... 5
Section 2.05 Governing Law.................................. 5
i
<PAGE>
SUPPLEMENTAL INDENTURE dated as of February 5, 1998 (the "Supplemental
Indenture"), amending the Indenture dated as of November 22, 1995 (the "Original
Indenture") between United International Holdings, Inc., a Delaware corporation
(the "Company"), and Firstar Bank of Minnesota, N.A., as successor trustee (the
"Trustee"), pursuant to which the Company issued $130,000,000 principal amount
at maturity of its 14% Senior Secured Discount Notes due 1999 (the
"Securities").
The parties entered into the Original Indenture to provide for the
issuance of the Securities and related matters.
Pursuant to section 9.02 of the Original Indenture, the consent of
holders of more than the required percentage of outstanding principal amount of
the Securities has been obtained for the amendment of the Original Indenture.
The Company and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders of the Securities:
ARTICLE I.
AMENDMENTS
----------
Section 1.01 DEFINITIONS.
(a) The following definitions shall be added to the Original
Indenture.
"New Notes" means the Company's 10 3/4% Senior Secured Discount
Notes due 2008 issued pursuant to an Indenture dated as of February 5,
1998 between the Company and the Trustee.
"Original Indenture" means the Indenture dated as of November 22,
1995 between the Company and the Trustee.
"Supplemental Indenture" means this Supplemental Indenture dated
as of February 5, 1998 between the Company and the Trustee.
(b) The following definition in the Original Indenture shall be
amended to read as follows:
"Indenture" means the Original Indenture and the Supplemental
Indenture, as further amended or supplemented from time to time.
(c) Section 1.01 of the Original Indenture shall be amended by
deleting in their entirety the following definitions, including any reference to
them in the Original Indenture: Consolidated Cash Flow, Consolidated Debt,
Consolidated Debt to Consolidated Cash Flow Ratio, Consolidated Invested Equity
Capital, Consolidated Net Income, Disqualified Stock, Existing Indebtedness,
Guarantee, Net Income, New Equity Offering Proceeds, Non-Recourse Debt,
<PAGE>
Permitted Refinancing Indebtedness, Project Financing, Related Business,
Subordinated Indebtedness, Total Market Capitalization, Total Market Value of
Equity, Weighted Average Life to Maturity.
(d) Section 1.02 of the Original Indenture shall be amended by
deleting in their entirety the following definitions, including any reference to
them in the Original Indenture: Affiliate Transaction, incur, Joint Venture
Offer, Joint Venture Payment and Unrestricted Investment.
Section 1.02 DELETION OF CERTAIN SECTIONS. The following sections of
the Original Indenture are hereby deleted in their entirety: Sections 4.05,
4.07, 4.08, 4.09, 4.11, 4.12, 4.13, 4.15, 4.18, 5.01, and 5.02.
Section 1.03 AMENDMENT TO SECTION 4.10. Section 4.10 of the Original
Indenture is hereby deleted in its entirety and the following new Section 4.10
shall be inserted in lieu thereof:
SECTION 4.10. ASSET SALES
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in an Asset Sale unless (i) the Company (or the
applicable Restricted Subsidiary, as the case may be) receives consideration at
the time of such Asset Sale at least equal to the fair market value (evidenced
by a resolution of the Board of Directors) of the assets sold or otherwise
disposed of and (ii) at least 85% of the consideration therefor received by the
Company or such Restricted Subsidiary is in the form of cash; PROVIDED, HOWEVER,
that the amount of (A) any liabilities of any Restricted Subsidiary as shown on
such Restricted Subsidiary's most recent balance sheet or in the notes thereto
(other than liabilities that are incurred in connection with, or in
contemplation of, such Asset Sale) that are assumed by the transferee of any
such assets and (B) any notes or other obligations received by the Company or
such Restricted Subsidiary from such transferee that are immediately converted
by the Company or such Restricted Subsidiary into cash (to the extent of the
cash received), shall be deemed to be cash for purposes of this paragraph.
Within 12 months after any Asset Sale, other than an Asset Sale of all
or part of the Company's direct or indirect ownership interest in JVI (or any
successor thereto), the Company (or the applicable Restricted Subsidiary, as the
case may be) may apply the Net Proceeds from such Asset Sale to make a Permitted
Investment (other than an Investment in Cash Equivalents). Any Net Proceeds from
an Asset Sale that are not applied within 12 months after such Asset Sale to
make a Permitted Investment as provided in the first sentence of this paragraph
and all Net Proceeds from an Asset Sale of all or part of the Company's direct
or indirect interests in JVI (or any successor thereto), less any amounts
required by the terms of any instrument governing any other Indebtedness ranking
senior or PARI PASSU in right of payment to the Senior Notes to be applied to
the repurchase or offer to repurchase by the Company of such other Indebtedness
as a result of any such Asset Sale, will be deemed to constitute "EXCESS
PROCEEDS," PROVIDED that, in the case of an Asset Sale by a Restricted
Subsidiary of the Company that is not a Wholly Owned Restricted Subsidiary of
the Company, only the Company's Pro Rata Portion of such Net Proceeds shall
constitute Excess Proceeds. Pending final application of any Net Proceeds of an
2
<PAGE>
Asset Sale to a Permitted Investment (other than Cash Equivalents) or to an
Asset Sale Offer, such Net Proceeds may only be invested in Cash Equivalents.
When the aggregate amount of Excess Proceeds exceeds $5 million, the Company
will be required to make an offer to all Holders to purchase the maximum
principal amount of Senior Notes that may be purchased out of the Excess
Proceeds (an "ASSET SALE OFFER"), at an offer price in cash equal to 100% of the
Accreted Value thereof as of the date of purchase (the "ASSET SALE PAYMENT"),
pursuant to the provisions of Section 3.01 hereof. The Asset Sale Offer shall
remain open for a period of 20 Business Days following its commencement and no
longer, except to the extent that a longer period is required by applicable law
(the "ASSET SALE OFFER PERIOD"). No later than five Business Days after the
termination of the Asset Sale Offer Period (the "ASSET SALE PURCHASE DATE"), the
Company shall purchase the principal amount of Securities required to be
purchased pursuant to this Section 4.10. To the extent that the aggregate
Accreted Value of Senior Notes tendered pursuant to an Asset Sale Offer is less
than the Excess Proceeds to be applied to purchase Senior Notes, the Company may
use any remaining Excess Proceeds for any purpose permitted by the other
provisions of this Indenture. If the aggregate Accreted Value of Senior Notes
surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee will select the Senior Notes to be purchased on a pro rata basis. Upon
completion of each Asset Sale Offer, the amount of Excess Proceeds shall be
reset at zero.
Notwithstanding the foregoing, to the extent that the Company or any
of its Restricted Subsidiaries receives securities or other noncash property or
assets as proceeds of an Asset Sale, such securities and other noncash proceeds
will not be treated as Net Proceeds of an Asset Sale unless and until the
Company receives cash or Cash Equivalents from a sale, repayment, exchange,
redemption or retirement of, or extraordinary dividend or return of capital on,
such securities or other noncash property and then only to the extent of the
cash of Cash Equivalents received.
Section 1.04 AMENDMENT TO SECTION 4.16. Section 4.16 of the Original
Indenture is hereby deleted in its entirety and the following new Section 4.16
shall be inserted in lieu thereof:
SECTION 4.16 SUBSIDIARY STRUCTURE.
Notwithstanding anything in the Indenture to the contrary, the Company
shall not make any Investment in any Person, directly or indirectly, other than
through UIPI or JVI, which together shall be required to hold, directly or
indirectly, all Investments made by the Company or any of its Restricted
Subsidiaries after the date of this Indenture (except that the Company may hold
cash or Cash Equivalents in amounts necessary to meet payroll and other
operating expenses of the Company and JVI). In addition, (i) each of UIPI and
JVI shall at all times continue to be a direct Wholly Owned Restricted
Subsidiary of the Company and the Company will not have any other direct
Subsidiaries, (ii) neither UIPI nor JVI shall (although its Restricted
Subsidiaries and Restricted Affiliates may) incur Indebtedness, except
intercompany Indebtedness from UIPI or JVI to the Company that is pledged
pursuant to the Pledge Agreement, or issue any preferred stock, (iii) JVI shall
at all times be the direct beneficial and record owner of all of the Company's
direct and indirect interests in UPC other than those interests held or reserved
to be held (as of the Issue Date) through the foundation administering UPC's
employee equity incentive plan, (iv) neither JVI nor UIPI shall incur or suffer
3
<PAGE>
to exist any Lien on any of its assets other than Permitted Liens, and (v)
neither JVI nor UIPI shall consolidate or merge with or into any other Person.
Section 1.05 AMENDMENT TO SECTION 6.01. Section 6.01, subparagraph (b)
of the Original Indenture is hereby deleted its entirety and the following new
subparagraph (b) shall be inserted in lieu thereof:
"(b) [intentionally omitted]."
Section 1.06 AMENDMENT TO SECTION 10.01. Section 10.01 of the Original
Indenture is hereby deleted in its entirety and the following new Section 10.01
shall be inserted in lieu thereof:
SECTION 10.01 PLEDGE AGREEMENT
The due and punctual payment of the principal of or Accreted Value (as
applicable), and premium, if any, on the Securities, the Senior Notes and the
New Notes when and as the same shall be due and payable, whether at maturity, by
acceleration, repurchase or otherwise, and interest on the overdue principal or
Accreted Value (as applicable) of, and premium, if any, on the Securities, the
Senior Notes and the New Notes and performance of all other obligations of the
Company to the Holders of Securities and Senior Notes or the Trustee under this
Indenture and the Securities and the indenture governing the terms of the Senior
Notes and the New Notes, according to the terms hereunder or thereunder, shall
be secured as provided in the Pledge Agreement that the Company has entered into
simultaneously with the execution of this Indenture, as amended, concurrently
with the issuance of the New Notes. Each Holder of Securities by its acceptance
thereof, consents and agrees to the terms of the Pledge Agreement (including,
without limitation, the provisions providing for foreclosure and release of
Pledged Collateral) as the same may be in effect or may be amended from time to
time in accordance with its terms and authorizes and directs the Collateral
Agent to enter into the Pledge Agreement and to perform its obligations and
exercise its rights thereunder in accordance therewith. The Company shall
deliver to the Trustee copies of all documents delivered to the Collateral Agent
pursuant to the Pledge Agreement, and shall do or cause to be done all such acts
and things as may be necessary or proper, or as may be required by the
provisions of the Pledge Agreement, to assure and confirm to the Trustee and the
Collateral Agent the security interest in the Pledged Collateral contemplated
hereby, by the Pledge Agreement or any part thereof, as from time to time
constituted, so as to render the same available for the security and benefit of
this Indenture and of the Securities secured hereby and the indenture governing
the terms of the Senior Notes and the New Notes, according to the intent and
purposes herein expressed. The Company shall take, or shall cause its
Subsidiaries to take, upon request of the Trustee, any and all actions
reasonably required to cause the Pledge Agreement to create and maintain, as
security for the Obligations of the Company hereunder, a valid and enforceable
perfected first priority Lien in and on all Pledged Collateral, in favor of the
Collateral Agent for the benefit of the Holders of the Securities, the Senior
Notes and the New Notes, superior to and prior to the rights of all other third
Persons and subject to no Liens other than Permitted Liens.
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ARTICLE II
MISCELLANEOUS
Section 2.01 ORIGINAL INDENTURE CONFIRMED AND RATIFIED. Except as for
the changes provided herein, the Original Indenture and the Securities are in
all other respects hereby approved, ratified and confirmed and shall remain in
full force and effect in accordance with their terms.
Section 2.02 SEVERABILITY. In case any provision in this Supplemental
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 2.03 COUNTERPART ORIGINALS. The parties may sign any number of
copies of this Supplemental Indenture. Each signed copy shall be an original,
but all of them together represent the same agreement.
Section 2.04 TABLE OF CONTENTS, HEADINGS, ETC. The Table of Contents
and Headings of the Articles and Sections of this Supplemental Indenture have
been inserted for convenience of reference only, are not to be considered a part
of this Supplemental Indenture and shall in no way modify or restrict any of the
terms or provisions hereof.
Section 2.05 GOVERNING LAW. The internal laws of the State of New York
shall govern and be used to construe this Supplemental Indenture.
[Signature page follows]
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IN WITNESS WHEREOF, the parties have each caused this Supplemental
Indenture to be duly executed and delivered as of the dates set forth below.
Dated as of February 5, 1998 UNITED INTERNATIONAL HOLDINGS, INC.
By: /s/ J. Timothy Bryan
--------------------------------------
J. Timothy Bryan
Chief Financial Officer
Attest:
/s/ Ellen P. Spangler (SEAL)
Dated as of February 5, 1998 FIRSTAR BANK OF MINNESOTA, N.A.
as successor in interest to
AMERICAN BANK NATIONAL ASSOCIATION
Trustee
By: /s/ Frank P. Leslie, III
--------------------------------------
Frank P. Leslie, III
Vice President
Attest:
/s/ Angela Weidell Labathe (SEAL)
6
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement") is made and entered into as of
February 5, 1998, by UNITED INTERNATIONAL HOLDINGS, INC., a Delaware corporation
(the "Pledgor"), having its principal office at 4643 South Ulster Street,
Denver, Colorado 80237, in favor of MORGAN STANLEY & CO. INCORPORATED, as
collateral agent (the "Collateral Agent"), having an office at 555 California
Street, San Francisco, California 94104, for the trustee (the "Trustee") under
the Indenture (as defined below). Capitalized terms issued and not defined
herein shall have the meanings given to such terms in the Indenture.
W I T N E S S E T H:
WHEREAS, the Pledgor is the legal and beneficial owner of (i) all of the
issued and outstanding shares of capital stock set forth on Schedule I hereto
(the "Pledged Shares") of Joint Venture, Inc., a Delaware corporation and a
direct wholly owned subsidiary of Pledgor (the "Issuer"), and (ii) each
intercompany promissory note issued by the Issuer in favor of the Pledgor (the
"Pledged Notes"), all of which Pledged Notes shall be in the form of Exhibit A
hereto; and
WHEREAS, the Pledgor and Firstar Bank of Minnesota N.A., as trustee, have
entered into that certain indenture dated as of January 5, 1998 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Indenture"), pursuant to which the Pledgor issued $1,375 million in aggregate
principal amount at maturity of 10-3/4% Senior Secured Discount Notes due 2008
(together with any notes or debentures issued in replacement thereof or in
exchange or substitution therefor, the "Original Notes"); and
WHEREAS, pursuant to the terms of the Indenture, the Pledgor is permitted
to issue additional notes ranking PARI PASSU with the Original Notes, (the
"Additional Notes" and, together with the Original Notes, the "Notes"); and
WHEREAS, the terms of the Indenture requires that the Pledgor (i) pledge to
the Collateral Agent for the benefit of the Trustee, and grant to the Collateral
Agent for the benefit of the Trustee a security interest in, the Pledged
Collateral (as defined herein) and (ii) execute and deliver a pledge agreement
in order to secure the payment and performance by the Pledgor of all of the
Obligations of the Pledgor under the Indenture and the Notes (the
"Obligations").
<PAGE>
AGREEMENT
NOW, THEREFORE, in consideration of the premises, and in order to induce
those who propose to become the Holders of the Original Notes and Additional
Notes to purchase such Original Notes and such Additional Notes, respectively,
the Pledgor and the Collateral Agent hereby enter into this Agreement, and the
Pledgor hereby agrees with the Collateral Agent for its benefit and the benefit
of such Trustee as follows:
SECTION 1. PLEDGE. Pledgor hereby pledges to the Collateral Agent for its
benefit and for the benefit of the Trustee, and grants to the Collateral Agent
for the benefit of the Trustee, a continuing first priority security interest in
all of its right, title and interest in the following (the "Pledged
Collateral"):
(a) the Pledged Shares and the certificates representing the Pledged
Shares, and all products and proceeds of any of the Pledged Shares, including,
without limitation, all dividends, cash, options, warrants, rights, instruments,
subscriptions and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the Pledged Shares or any of the foregoing; and
(b) all additional shares of, and all securities convertible into and all
war rants, options or other rights to purchase, Capital Stock of, or other
Equity interests in, the Issuer from time to time acquired by the Pledgor in any
manner, and the certificates representing such additional shares and Equity
Interests (any such additional shares and Equity Interests and other items shall
constitute part of the Pledged Shares under and as defined in this Agreement),
and all products and proceeds of any of the foregoing, including, without
limitation, all dividends, cash, options, warrants, rights, instruments,
subscriptions, and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the foregoing; and
(c) the Pledged Notes and the instruments representing the Pledged Notes,
and all products and proceeds of the Pledged Notes, including, without
limitation, all interest, principal and premium payments, and all instruments
and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for the Pledged Notes or any of the
foregoing; and
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(d) all additional promissory notes of the Issuer from time to time held by
the Pledgor in any manner (any such additional promissory notes shall constitute
part of the Pledged Notes under and as defined in this Agreement) and all
products and proceeds of any of such additional Pledged Notes, including,
without limitation, all interest and principal payments, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such additional Pledged Notes or any
of the foregoing.
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures the prompt and
complete payment and performance when due (whether at stated maturity, by
acceleration, by repurchase or otherwise) of all Obligations of the Pledgor
under the Indenture and the Notes (including, without limitation, the Accreted
Value of and premium, if any, on the Notes and any other Obligations accruing
after the date of any filing by the Pledgor of any petition in bankruptcy or the
commencement of any bankruptcy, insolvency or similar proceeding with respect to
the Pledgor).
SECTION 3. DELIVERY OF PLEDGED COLLATERAL. Pledgor hereby agrees that all
certificates or instruments representing or evidencing the Pledged Collateral
shall be immediately delivered to and held at all times by the Collateral Agent
pursuant hereto at the Collateral Agent's office in the State of New York and
shall be in suitable form for transfer by delivery, or issued in the name of
Pledgor and accompanied by instruments of transfer or assignment duly executed
in blank and undated, and in either case having attached thereto all requisite
Federal or state stock transfer tax stamps, all in form and substance
satisfactory to the Collateral Agent. All securities, whether certificated,
uncertificated or book entry, if any, representing or evidencing the Pledged
Collateral shall be registered in the name of the Collateral Agent or any of its
nominees by book entry or in any other appropriate manner that is acceptable to
the Collateral Agent, so as to properly identify the interest of the Collateral
Agent therein. In addition, the Collateral Agent shall have the right, at any
time following the occurrence of an Event of Default (as defined in any of the
Notes or in any of the Indentures with respect to the Notes), in its discretion
to transfer to or to register in the name of the Collateral Agent or any of its
nominees any or all of the Pledged Collateral. The Collateral Agent shall have
the right at any time to exchange certificates or instruments representing or
evidencing all or any portion of the Pledged Collateral for certificates or
instruments of smaller or larger denominations in the same aggregate amount.
SECTION 4. REPRESENTATIONS AND WARRANTIES. The Pledgor hereby makes all
representations and warranties applicable to the Pledgor contained in the
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Indenture. The Pledgor further represents and warrants, to the Collateral Agent
and for the benefit of the Holders, that:
(a) The execution, delivery and performance by the Pledgor of this
Agreement are within the Pledgor's corporate powers, have been duly authorized
by all necessary corporate action, and do not contravene, or constitute a
default under, any provision of applicable law or regulation or of the
certificate of incorporation or bylaws of the Pledgor or of any agreement,
judgment, injunction, order, decree or other instrument binding upon the
Pledgor, or result in the creation or imposition of any Lien on any assets of
the Pledgor, other than the Lien contemplated hereby.
(b) The Pledged Shares have been duly authorized and validly issued and are
fully paid and non-assessable. Each Pledged Note has been duly authorized and
executed by the Issuer and constitutes a legal, valid and binding obligation of
the Issuer, enforceable against the Issuer in accordance with its terms.
(c) The Pledged Shares constitute all of the authorized, issued and
outstanding Equity Interests of the Issuer and constitute all of the Equity
Interests of the Issuer beneficially owned by the Pledgor and there are no other
instruments, certificates, securities or other writings or chattel paper,
evidencing or representing any equity interest in the Issuer.
(d) All intercompany indebtedness of the Issuer to the Pledgor is evidenced
by promissory notes in the form of Exhibit A hereto; the Pledged Notes
constitute all of the promissory notes of the Issuer in favor of the Pledgor.
(e) The Pledgor is the legal, record and beneficial owner of the Pledged
Collateral, free and clear of any Lien or claims of any Person except for the
security interest created by this Agreement.
(f) The Pledgor has full power and authority to enter into this Agreement
and has the right to vote, pledge and grant a security interest in the Pledged
Collateral as provided by this Agreement.
(g) This Agreement has been duly executed and delivered by the Pledgor and
constitutes a legal, valid and binding obligation of the Pledgor, enforceable
against the Pledgor in accordance with its terms.
(h) Upon the delivery to the Collateral Agent of the Pledged Collateral and
(as to certain proceeds therefrom) the filing of Uniform Commercial Code (the
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"UCC") financing statements, the pledge of the Pledged Collateral pursuant to
this Agreement creates a valid and perfected first priority security interest in
the Pledged Collateral, securing the payment of the Obligations for the benefit
of the Collateral Agent and the Holders, and enforceable as such against all
creditors of the Pledgor and any Persons purporting to purchase any of the
Pledged Collateral from the Pledgor.
(i) No consent of any other Person and no consent, authorization, approval,
or other action by, and no notice to or filing with, any governmental authority
or regulatory body is required either (i) for the pledge by the Pledgor of the
Pledged Collateral pursuant to this Agreement or for the execution, delivery or
performance of this Agreement by the Pledgor or (ii) for the exercise by the
Collateral Agent of the voting or other rights provided for in this Agreement or
the remedies in respect of the Pledged Collateral pursuant to this Agreement
(except as may be required in connection with such disposition by laws affecting
the offering and sale of securi ties).
(j) No litigation, investigation or proceeding of or before any arbitrator
governmental authority is pending or, to the best knowledge of the Pledgor,
threatened by or against the Pledgor or against any of its properties or
revenues with respect to this Agreement or any of the transactions contemplated
hereby.
(k) The pledge of the Pledged Collateral pursuant to this Agreement is not
prohibited by any applicable law or governmental regulation, release,
interpretation or opinion of the Board of Governors of the Federal Reserve
System or other regulatory agency (including, without limitation, Regulations G,
T, U and X of the Board of Governors of the Federal Reserve System).
(l) All information set forth herein relating to the Pledged Collateral is
accurate and complete in all material respects.
SECTION 5. FURTHER ASSURANCE. Pledgor will at all times cause the security
interests granted pursuant to this Agreement to constitute valid perfected first
priority security interests in the Pledged Collateral, enforceable as such
against all creditors of Pledgor and (except as otherwise specifically provided
herein) any Persons purporting to purchase any Pledged Collateral from Pledgor.
The Pledgor will, promptly upon request by the Collateral Agent, execute and
deliver or cause to be executed and delivered, or use its best efforts to
procure, all stock powers, proxies, tax stamps, assignments, instruments and
other documents, all in form and substance satisfactory to the Collateral Agent,
deliver any instruments to the Collateral Agent and take any other actions that
are necessary or, in the reasonable opinion of the Collateral Agent, desirable
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to perfect, continue the perfection of, or protect the first priority of the
Collateral Agent's security interest in, the Pledged Collateral, to protect the
Pledged Collateral against the rights, claims, or interests of third persons, to
enable the Collateral Agent to exercise or enforce its rights and remedies
hereunder, or otherwise to effect the purposes of this Agreement. The Pledgor
also hereby authorizes the Collateral Agent to file any financing or
continuation statements with respect to the Pledged Collateral without the
signature of the Pledgor to the extent permitted by applicable law. The Pledgor
will pay all costs incurred in connection with any of the foregoing.
SECTION 6. VOTING RIGHTS DIVIDENDS, ETC.
(a) So long as no Event of Default shall have occurred and be continuing
under the Indenture, the Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Pledged Shares or any part
thereof for any purpose not inconsistent with the terms of this Agreement or the
Indenture; PROVIDED, HOWEVER, that the Pledgor shall not exercise or shall
refrain from exercising any such right if such action would have a material
adverse effect on the value of the Pledged Collateral or any part thereof or be
inconsistent with or violate any provisions of this Agreement or the Indenture.
(b) So long as no Event of Default shall have occurred and be continuing
under the Indenture, the Pledgor shall be entitled to receive, and to utilize
(subject to the provisions of the Indenture) free and clear of the Lien of this
Agreement, all cash payments of principal and interest paid from time to time
with respect to any Pledged Notes; PROVIDED, HOWEVER, that the Pledgor will be
entitled to receive interest and other payments from the Issuer sufficient to
permit the Pledgor to satisfy its and JVI's ordinary course operating expenses
whether or not an Event of Default shall have occurred.
(c) So long as no Event of Default shall have occurred and be continuing
under the Indenture, and subject to the other terms and conditions of the
Indenture, the Pledgor shall be entitled to receive, and to utilize (subject to
the provisions of the Indenture) free and clear of the Lien of this Agreement,
all regular and ordinary cash dividends paid from time to time in respect of the
Pledged Shares; PROVIDED, HOW EVER, that the Pledgor will be entitled to receive
dividends from the Issuer sufficient to permit the Pledgor to satisfy its and
JVI's ordinary course operating expenses whether or not an Event of Default
shall have occurred.
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(d) Any and all (i) dividends, other distributions, interest and principal
payments paid or payable in the form of instruments and/or other property (other
than cash payments permitted under Section 6(b) hereof and cash dividends
permitted under Section 6(c) hereof) received, receivable or otherwise
distributed in respect of, or in exchange for, any Pledged Collateral, (ii)
dividends and other distributions paid or payable in cash in respect of any
Pledged Shares in connection with a partial or total liquidation or dissolution
or in connection with a reduction of capital, capital surplus or
paid-in-surplus, and (iii) cash paid, payable or otherwise distributed in
redemption of, or in exchange for, any Pledged Collateral, shall in each case be
forthwith delivered to the Collateral Agent to hold as Pledged Collateral and
shall, if received by the Pledgor, be received in trust for the benefit of the
Collateral Agent and the Holders, be segregated from the other property and
funds of the Pledgor and be forthwith delivered to the Collateral Agent as
Pledged Collateral in the same form as so received (with any necessary
endorsements).
(e) The Collateral Agent shall execute and deliver (or cause to be executed
and delivered) to the Pledgor all such proxies and other instruments as the
Pledgor may reasonably request for the purpose of enabling the Pledgor to
exercise the voting and other rights that it is entitled to exercise pursuant to
Sections 6(a) through 6(c) above.
(f) Upon the occurrence and during the continuance of an Event of Default
under the Indenture, (i) all rights of the Pledgor to exercise the voting and
other consensual rights that it would otherwise be entitled to exercise pursuant
to Section 6(a) shall cease, and all such rights shall thereupon become vested
in the Collateral Agent, which, to the extent permitted by law, shall thereupon
have the sole right to exercise such voting and other consensual rights, and
(ii) all cash interest payments and dividends and other distributions payable in
respect of the Pledged Collateral shall be paid to the Collateral Agent and the
Pledgor's right to receive such cash payments pursuant to Sections 6(b) and 6(c)
hereof shall immediately cease, except as otherwise permitted pursuant to the
provisions of Sections 6(b) and 6(c) hereof.
(g) Upon the occurrence and during the continuance of an Event of Default
under the Indenture, the Pledgor shall execute and deliver (or cause to be
executed and delivered) to the Collateral Agent all such proxies, dividend and
interest payment orders and other instruments as the Collateral Agent may
reasonably request for the purpose of enabling the Collateral Agent to exercise
the voting and other rights that it is entitled to exercise pursuant to Section
6(f) above.
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(h) All payments of interest, principal or premium and all dividends and
other distributions that are received by the P1edgor contrary to the provisions
of this Section 6 shall be received in trust for the benefit of the Collateral
Agent and the Holders, shall be segregated from the other property or funds of
the Pledgor and shall be forthwith delivered to the Collateral Agent as Pledged
Collateral in the same form as so received (with any necessary endorsements).
SECTION 7. [Intentionally Omitted]
SECTION 8. [Intentionally Omitted]
SECTION 9. COVENANTS. The Pledgor hereby covenants and agrees with the
Collateral Agent and the Holders that it will comply with all of the
obligations, requirements and restrictions applicable to the Pledgor contained
in the Indenture. The Pledgor further covenants and agrees, from and after the
date of this Agreement and until the Obligations have been paid in full, as
follows:
(a) The Pledgor agrees that it will not (i) sell, assign, transfer, convey
or otherwise dispose of, or grant any option or warrant with respect to, any of
the Pledged Collateral without the prior written consent of the Collateral
Agent, (ii) create or permit to exist any Lien upon or with respect to any of
the Pledged Collateral, except for the security interest granted under this
Agreement, and at all times will be the sole beneficial owner of the Pledged
Collateral, (iii) enter into any agreement or understanding that purports to or
that may restrict or inhibit the Collateral Agent's rights or remedies
hereunder, including, without limitation, the Collateral Agent's right to sell
or otherwise dispose of the Pledged Collateral, (iv) take any action, or permit
the holding of any action by the Issuer, with respect to the Pledged Collateral
the taking of which would result in a material impairment of the economic value
of the Pledged Collateral as Collateral or a violation of the Indenture or this
Agreement, including, without limitation, the issuance by the Issuer of any
additional Equity Interests or promissory notes or the issuance by the Issuer of
any Indebtedness, in each case to Persons other than the Pledgor (v) without the
prior written consent of the Collateral Agent, enter into any agreement
amending, modifying or supplementing the interest, principal or maturity terms
of the Pledged Notes in a manner adverse to the interests of the Collateral
Agent and the Holders, (vi) fail to give prompt notice to the Collateral Agent
of any notice of default given by or to the Pledgor under or with respect to the
Pledged Notes together with a complete copy of such notice, (vii) permit the
Issuer to merge or consolidate with or into another person or entity or sell or
transfer all or substantially all of its assets to another person or entity,
except as permitted by the Indenture as in effect on the Issue Date, or (viii)
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fail to pay or discharge any tax, assessment or levy of any nature not later
than five days prior to the date of any proposed sale under any judgement, writ
or warrant of attachment with regard to the Pledged Collateral.
(b) The Pledgor agrees that immediately upon becoming the beneficial owner
of any additional shares of Capital Stock, notes, other securities or Equity
Interests of the Issuer (including as a result of the merger or consolidation of
the Issuer with or into another entity) it will pledge and deliver to the
Collateral Agent for its benefit and the ratable benefit of the Holders and
grant to the Collateral Agent for its benefit and the ratable benefit of the
Holders, a continuing first priority security interest in such shares, notes,
other securities or Equity Interests (as well as instruments of transfer or
assignment duly executed in blank and undated and any necessary stock transfer
tax stamps, all in form and substance satisfactory to the Collateral Agent). The
Pledgor further agrees that it will promptly (i) cause the Issuer upon becoming
indebted to the Pledgor to execute a promissory note in the form of Exhibit A
hereto evidencing such debt in order that such promissory note may be promptly
pledged as a Pledged Note pursuant hereto and (ii) deliver to the Collateral
Agent a certificate executed by a principal executive officer of the Pledgor
describing such additional notes and certifying that the same have been duly
pledged and delivered to the Collateral Agent hereunder.
SECTION 10. POWER OF ATTORNEY. In addition to all of the powers granted to
the Collateral Agent pursuant to Section 10.06 of the Indenture, the Pledgor
hereby appoints and constitutes the Collateral Agent as the Pledgor's
attorney-in-fact to exercise all of the following powers upon and at any time
after the occurrence of an Event of Default: (i) collection of proceeds of any
Pledged Collateral; (ii) convey ance of any item of Pledged Collateral to any
purchaser thereof; (iii) giving of any notices or recording of any Liens under
Section 5 hereof; (iv) making of any pay ments or taking any acts under Section
11 hereof and (v) paying or discharging taxes or Liens levied or placed upon or
threatened against the Pledged Collateral, the legality or validity thereof and
the amounts necessary to discharge the same to be determined by the Collateral
Agent in its sole discretion, and such payments made by the Collateral Agent to
become the obligations of the Pledgor to the Collateral Agent, due and payable
immediately without demand. The Collateral Agent's authority hereunder shall
include, without limitation, the authority to endorse and negotiate, for the
Collateral Agent's own account, any checks or instruments in the name of the
Pledgor, execute and give receipt for any certificate of ownership or any
document, transfer title to any item of Pledged Collateral, sign the Pledgor's
name on all financing statements or any other documents deemed necessary or
appropriate to preserve, protect or perfect the security interest in the Pledged
Collateral and to file the same, prepare, file and sign the Pledgor's name on
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any notice of Lien, and prepare, file and sign the Pledgor's name on a proof of
claim in bankruptcy or similar document against any creditor of the Pledgor, and
to take any other actions arising from or incident to the powers granted to the
Collateral Agent in this Agreement. This power of attorney is coupled with an
interest and is irrevocable by the Pledgor.
SECTION 11. COLLATERAL AGENT MAY PERFORM. If the Pledgor fails to perform
any agreement contained herein, the Collateral Agent may itself perform, or
cause performance of, such agreement, and the reasonable expenses of the
Collateral Agent incurred in connection therewith shall be payable by the
Pledgor under Section 16 hereof.
SECTION 12. NO ASSUMPTION OF DUTIES: REASONABLE CARE. The rights and powers
granted to the Collateral Agent hereunder are being given in order to preserve
and protect the Collateral Agent's and the Holders' security interest in and to
the Pledged Collateral granted hereby and shall not be interpreted to, and shall
not, impose any duties on the Collateral Agent in connection therewith. The
Collateral Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Pledged Collateral in its possession if the
Pledged Collateral is accorded treatment substantially equal to that which the
Collateral Agent accords its own property, it being understood that the
Collateral Agent shall not have any responsibility for (i) ascertaining or
taking action with respect to calls, conversions, exchanges, maturities, tenders
or other matters relative to any Pledged Collateral, whether or not the
Collateral Agent has or is deemed to have knowledge of such matters, or (ii)
taking any necessary steps to preserve rights against any parties with respect
to any Pledged Collateral.
SECTION 13. SUBSEQUENT CHANCES AFFECTING COLLATERAL. The Pledgor represents
to the Collateral Agent and the Holders that the Pledgor has made its own
arrangements for keeping informed of changes or potential changes affecting the
Pledged Collateral (including, but not limited to, rights to convert, rights to
sub scribe, payment of dividends, payments of interest and/or principal,
reorganization or other exchanges, tender offers and voting rights), and the
Pledgor agrees that the Collateral Agent and the Holders shall have no
responsibility or liability for inform ing the Pledgor of any such changes or
potential changes or for taking any action or omitting to take any action with
respect thereto. The Pledgor covenants that it will not, without the prior
written consent of the Collateral Agent, vote to enable, or take any other
action to permit, the Issuer to issue any capital stock or other securities or
to sell or otherwise dispose of, or grant any option with respect to, any of the
Pledged Collateral or create or permit to exist any Lien upon or with respect to
any of the Pledged Collateral, except for the security interests granted under
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this Agreement. The Pledgor will defend the right, title and interest of the
Collateral Agent and the Holders in and to the Pledged Collateral against the
claims and demands of all Persons.
SECTION 14. REMEDIES UPON DEFAULT.
(a) If any Event of Default shall have occurred and be continuing under the
Indenture, the Collateral Agent and the Holders shall have, in addition to all
other rights given by law or by this Agreement or the Indenture, all of the
rights and remedies with respect to the Pledged Collateral of a secured party
under the UCC as in effect in the State of New York at that time. The Collateral
Agent may, without notice and at its option, transfer or register, and the
Pledgor shall register or cause to be registered upon request therefor by the
Collateral Agent, the Pledged collateral or any part thereof on the books of the
issuer into the name of the Collateral Agent or the Collateral Agent's
nominee(s), with or without any indication that such Pledged Collateral is
subject to the security interest hereunder. In addition, with respect to any
Pledged Collateral that shall then be in or shall thereafter come into the
possession or custody of the Collateral Agent, the collateral Agent may sell or
cause the same to be sold at any broker's board or at public or private sale, in
one or more sales or lots, at such price or prices as the Collateral Agent may
deem best, for cash or on credit or for future delivery, without assumption of
any credit risk. The purchaser of any or all Pledged Collateral so sold shall
thereafter hold the same absolutely, free from any claim, encumbrance or right
of any kind whatsoever. Unless any of the Pledged Collateral threatens to
decline speedily in value or is or becomes of a type sold on a recognized
market, the Collateral Agent will give Pledgor reasonable notice of the time and
place of any public sale thereof, or of the time after which any private sale or
other intended disposition is to be made. Any sale of the Pledged Collateral
conducted in conformity with reasonable commercial practices of banks, insurance
companies, commercial finance companies, or other financial institutions
disposing of property similar to the Pledged Collateral shall be deemed to be
commercially reasonable. Any requirements of reasonable notice shall be met if
such notice is mailed to the Pledgor as provided below in Section 20.1, at least
ten days before the time of the sale or disposition. Any other requirement of
notice, demand or adver tisement for sale is, to the extent permitted by law,
waived by the Pledgor. The Collateral Agent or any Holder may, in its own name
or in the name of a designee or nominee, buy any of the Pledged Collateral at
any public sale and, if permitted by a pplicable law, at any private sale.
All expenses (including court costs and reasonabl attorneys' fees and
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disbursements) of, or incident to, the enforcement of any of the provisions
hereof shall be recoverable from the proceeds of the sale or other disposition
of the Pledged Collateral.
(b) If the Collateral Agent shall determine to exercise its right to sell
any or all of the Pledged Shares pursuant to Section 14(a) above, and if in the
opinion of counsel for the Collateral Agent it is necessary, or if in the
opinion of the Collateral Agent it is advisable, to have the Pledged Shares or
that portion thereof to be sold, registered under the provisions of the
Securities Act of 1933, as amended (the "Securities Act"), Pledgor will cause
the Issuer to (i) execute and deliver, and cause its directors and officers to
execute and deliver, all at the Issuer's expense, all such instruments and
documents, and to do or cause to be done all such other acts and things as may
be necessary or, in the opinion of the Collateral Agent, advisable to register
such Pledged Shares under the provisions of the Securities Act, (ii) use its
best efforts to cause the registration statement relating thereto to become
effective and to remain effective for a period of 180 days from the date of the
first public offering of such Pledged Shares, or that portion thereof to be sold
and (iii) make all amendments thereto and/or to the related prospectus that, in
the opinion of the Collateral Agent, are necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto.
Pledgor agrees to cause the Issuer to comply with the provisions of the
securities or "Blue Sky" laws of any jurisdiction that the Collateral Agent
shall designate for the sale of the Pledged Shares and to make available to the
Issuer's security holders, as soon as practicable, an earnings statement (which
need not be audited) that will satisfy the provisions of Section 11(a) of the
Securities Act. The Pledgor will cause such Issuer to furnish to the Collateral
Agent such number of copies as the Collateral Agent may reasonably request of
each preliminary and final prospectus, to notify the Collateral Agent promptly
of the happening of any event as a result of which any then effective prospectus
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of then existing circumstances, and to cause the
Collateral Agent to be furnished with such number of copies as the Collateral
Agent may request of such supplement to or amendment of such prospectus. The
Pledgor will cause the Issuer, to the extent permitted by law, to indemnify,
defend and hold harmless the Collateral Agent and the Holders (and their
respective agents and controlling persons) from and against all losses,
liabilities, expenses or claims (including reasonable legal expenses and the
reasonable costs of investigation) that the Collateral Agent or the Holders (and
their respective agents and controlling persons) may incur under the Securities
Act or otherwise, insofar as such losses, liabilities, expenses or claims arise
out of or are based upon any alleged untrue statement of a material fact
contained in such registration statement (or any amendment thereto) or in any
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preliminary or final prospectus (or any amendment or supplement thereto), or
arise out of or are based upon any alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except to the extent that any such losses, liabilities, expenses or
claims arise solely out of or are based upon any such alleged untrue statement
made or such alleged omission to state a material fact included or excluded on
the written direction of the Collateral Agent. Pledgor will cause the Issuer to
bear all costs and expenses of carrying out its obligations hereunder.
(c) In view of the fact that Federal and state securities laws may impose
certain restrictions on the method by which a sale of the Pledged Collateral may
be effected after an Event of Default, Pledgor agrees that upon the occurrence
or existence of any Event of Default, the Collateral Agent may, from time to
time, attempt to sell all or any part of the Pledged Collateral by means of a
private placement, restricting the prospective purchasers to those who will
represent and agree that they are purchasing for investment only and not for
distribution. In so doing, the Collateral Agent may solicit offers to buy the
Pledged Collateral, or any part of it, for cash, from a limited number of
investors who might be interested in purchasing the Pledged Collateral. The
Pledgor acknowledges and agrees that any such private sale may result in prices
and terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Collateral
Agent shall be under no obligation to delay a sale of any of the Pledged
Collateral for the period of time necessary to permit the issuer to register
such securities for public sale under the Securities Act, or under applicable
state securities laws, even if the Issuer agrees to do so.
(d) [Intentionally Omitted]
(e) The Pledgor further agrees to use its best efforts to do or cause to be
done all such other acts as may be necessary to make such sale or sales of all
or any portion of the Pledged Collateral pursuant to this Section 14 valid and
binding and in compliance with any and all other applicable requirements of law.
The Pledgor further agrees that a breach of any of the covenants contained in
this Section 14 will cause irreparable injury to the Collateral Agent and the
Holders, that the Collateral Agent and the Holders have no adequate remedy at
law in respect of such breach and, as a consequence, that each and every
covenant contained in this Section 14 shall be specifically enforceable against
the Pledgor, and the Pledgor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that no Event of Default has occurred under the Indenture.
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(f) If the Collateral Agent deems it appropriate, the Collateral Agent
shall retain an investment bank to perform, or assist it in performing the
obligations set forth in Sections 14(b) and 14(c) hereof, whose usual and
customary fees and expenses shall be paid by the Pledgor in accordance with
Section 16 hereof.
SECTION 15. IRREVOCABLE AUTHORIZATION AND INSTRUCTION TO THE ISSUER. The
Pledgor, will and hereby, authorizes and instructs the Issuer to comply with any
instruction received by the Issuer from the Collateral Agent that (i) states
that an Event of Default has occurred and (ii) is otherwise in accordance with
the terms of this Agreement, without any other or further instructions from the
Pledgor, and the Pledgor agrees that the Issuer shall be fully protected in so
complying.
SECTION 16. FEES AND EXPENSES. The Pledgor will upon demand pay to the
Collateral Agent the amount of any and all reasonable fees and expenses
(including, without limitation, the reasonable fees and disbursements of its
counsel, of any investment banking firm, business broker or other selling agent
and of any other experts and agents retained by the Collateral Agent) that the
Collateral Agent may incur in connection with (i) the administration of this
Agreement, (ii) the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of the Collateral Agent and the Holders
hereunder, or (iv) the failure by the Pledgor to perform or observe any of the
provisions hereof.
SECTION 17. NOTE INTEREST ABSOLUTE. All rights of the Collateral Agent and
the Holders and the security interests created hereunder, and all obligations of
the Pledgor hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforce ability of the Indenture or any other
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Obligations, or any other amendment or waiver of or
any consent to any departure from the Indenture;
(c) any exchange, surrender, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to departure
from any guarantee, for all or any of the Obligations; or
(d) any other circumstance that might otherwise constitute a defense avail
able to, or a discharge of, the Pledgor in respect of the Obligations or of this
Agreement.
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SECTION 18. APPLICATION OF PROCEEDS. Upon the occurrence and during the
continuance of an Event of Default under the Indenture, the proceeds of any sale
of, or other realization upon (other than the realization described in Sections
6(b) and 6(c), in which case funds may be applied as permitted by such
Sections), all or any part of the Pledged Collateral and any cash held shall be
applied by the Collateral Agent in the following order of priorities:
FIRST, to payment of the expenses of such sale or other realization,
including reasonable compensation to agents and counsel for the Collateral
Agent, and all reasonable expenses, liabilities and advances incurred or made by
the Collateral Agent in connection therewith, and any other unreimbursed fees
and expenses for which the Collateral Agent is to be reimbursed pursuant to
Section 16 hereof;
SECOND, to the ratable payment (based on the Accreted Value of Notes
deemed by the Indenture to be outstanding for purposes of waivers or consents at
the time of distribution) of unpaid Accreted Value of, and premium, if any, on
such outstanding Notes;
THIRD, to the ratable payment (based on the principal amount of Notes
deemed by the Indenture to be outstanding at the time of distribution) of all
other Obligations, until all Obligations shall have been paid in full; and
FINALLY, to payment to the Pledgor or its successors or assigns, or as
a court of competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
SECTION 19. UNCERTIFICATED SECURITIES. Notwithstanding anything to the
contrary contained herein, if any Pledged Collateral (whether now owned or
hereafter acquired) is in the form of an uncertificated security, the Pledgor
shall promptly notify the Collateral Agent, and shall promptly take all actions
required to perfect the security interest of the Collateral Agent under
applicable law (including, in any event, under Sections 8-313 and 8-321 of the
New York Uniform Commercial Code). The Pledgor further agrees to take such
actions as the Collateral Agent deems necessary or desirable to effect the
foregoing and to permit the Collateral Agent to exercise any of its rights and
remedies hereunder, and agrees to provide an Opinion of Counsel satisfactory to
the Pledgee with respect to any such pledge of uncertificated Pledged Collateral
promptly upon request of the Collateral Agent.
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SECTION 20. MISCELLANEOUS PROVISIONS.
Section 20.1 NOTICES. All notices, approvals, consents or other
communications required or desired to be given hereunder shall be in the form
and manner as set forth in Section 11.02 of the Indenture, and delivered to the
addresses set forth in such Section, or, in the case of the Collateral Agent,
to: Morgan Stanley & Company Inc., 555 California Street, San Francisco,
California 94104, Attention: Michael Grunwald, Telephone No. (415) 982-2902.
Section 20.2 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon any
request or application by the Pledgor to the Collateral Agent to take any action
or omit to take any action under this Agreement, the Pledgor shall deliver to
the Collateral Agent an Officer's Certificate and/or an Opinion of Counsel in
accordance with the requirements of Section 11.04 of the Indenture.
Section 20.3 ADVERSE INTERPRETATION OF OTHER AGREEMENTS. This Agreement may
not be used to interpret another pledge, security or debt agreement of the
Pledgor, the Issuer or any subsidiary thereof. No such pledge, security or debt
agreement may be used to interpret this Agreement.
Section 20.4 SEVERABILITY. The provisions of this Agreement are severable,
and if any clause or provision shall be held invalid or unenforceable in whole
or in part in any jurisdiction, then such invalidity or unenforceability shall
affect in that jurisdiction only such clause or provision, or part thereof, and
shall not in any manner affect such clause or provision in any other
jurisdiction or any other clause or provision of this Agreement in any
jurisdiction.
Section 20.5 NO RECOURSE AGAINST OTHERS. No director, officer, employee,
stockholder or affiliate, as such, of the Pledgor or the Issuer shall have any
liability for any obligations of the Pledgor under this Agreement or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Holder, by accepting a Note, waives and releases all such
liability. The waiver and release are part of the consideration for the issue of
the Notes.
Section 20.6 HEADINGS. The headings of the Articles and Sections of this
Agreement have been inserted for convenience of reference only, are not to be
considered a part hereof and shall in no way modify or restrict any of the terms
or provisions hereof.
Section 20.7 COUNTERPART ORIGINALS. This Agreement may be signed in two or
more counterparts. Each signed copy shall be an original, but all of them
together represent one and the same agreement. Each counterpart may be executed
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and delivered by Telecopy, if such delivery is promptly followed by the original
manually signed copy sent by overnight courier.
Section 20.8 BENEFITS OF AGREEMENT. Nothing in this Agreement, express or
implied, shall give to any Person, other that the parties hereto and their
successors hereunder, and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Agreement.
Section 20.9 AMENDMENTS, WAIVERS AND CONSENTS. Any amendment or waiver of
any provision of this Agreement and any consent to any departure by the Pledgor
from any provision of this Agreement shall be effective only if made or given in
compliance with all of the terms and provisions of the Indenture, necessary for
amendments or waivers of, or consents to any departure by the Pledgor from any
provision of the Indenture, as applicable, and neither the Collateral Agent nor
any Holder shall be deemed, by any act, delay, indulgence, omission or
otherwise, to have waived any right or remedy hereunder or to have acquiesced in
any Default or Event of Default or in any breach of any of the terms and
conditions hereof. Failure of the Collateral Agent or any Holder to exercise, or
delay in exercising, any right, power or privilege hereunder shall not operate
as a waiver thereof. No single or partial exercise of any right, power or
privilege hereunder shall preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. A waiver by the Collateral
Agent or any Holder of Notes of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy that the
Collateral Agent or such Holder of Notes would otherwise have on any future
occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any rights or remedies
provided by law.
Section 20.10 INTERPRETATION OF AGREEMENT. Time is of the essence in each
provision of this Agreement of which time is an element. All terms not defined
herein or in any of the Indentures shall have the meaning set forth in the
applicable UCC, except where the context otherwise requires. To the extent a
term or provision of this Agreement conflicts with the Indenture and is not
dealt with herein with more specificity, the Indenture shall control with
respect to the subject matter of such term or provision. Acceptance of or
acquiescence in a course of performance rendered under this Agreement shall not
be relevant to determine the meaning of this Agreement even though the accepting
or acquiescing party had knowledge of the nature of the performance and
opportunity for objection.
Section 20.11 CONTINUANCE SECURITY INTEREST; TRANSFER OF NOTES. This
Agreement shall create a continuing security interest in the Pledged Collateral
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and shall (i) remain in full force and effect until the payment in full of all
the Obligations and all the fees and expenses owing to the Collateral Agent,
(ii) be binding upon the Pledgor, its successors and assigns, and (iii) inure,
together with the rights and remedies of the Collateral Agent hereunder, to the
benefit of the Collateral Agent, the holders and their respective successors and
assigns.
Section 20.12 REINSTATEMENT. This Agreement shall continue to be effective
or be reinstated if at any time any amount received by the Collateral Agent or
any Holder of Notes in respect of the Obligations is rescinded or must otherwise
be restored or returned by the Collateral Agent or any Holder of Notes upon the
insolvency, bankruptcy dissolution, liquidation or reorganization of the Pledgor
or upon the appointment of any receiver, intervenor, conservator, trustee or
similar official for the Pledgor or any substantial part of its assets, or
otherwise, all as though such payments had not been made.
Section 20.13 SURVIVAL OF PROVISIONS. All representations, warranties and
covenants of the Pledgor contained herein shall survive the execution and
delivery of this Agreement, and shall terminate only upon the full and final
payment and performance by the Pledgor of the Obligations.
Section 20.14 WAIVERS. The Pledgor waives presentment and demand for
payment of any of the Obligations, protest and notice of dishonor or default
with respect to any of the Obligations, and all other notices to which the
Pledgor might otherwise be entitled, except as otherwise expressly provided
herein or in the Indenture.
Section 20.15 AUTHORITY OF THE COLLATERAL AGENT.
(a) The Collateral Agent shall have and be entitled to exercise all powers
hereunder that are specifically granted to the Collateral Agent by the terms
hereof, together with such powers as are reasonably incident thereto. The
Collateral Agent may perform any of its duties hereunder or in connection with
the Pledged Collateral by or through agents or employees and shall be entitled
to retain counsel and to act in reliance upon the advice of counsel concerning
all such matters. Neither the Collateral Agent nor any director, officer,
employee, attorney or agent of the Collateral Agent shall be responsible for the
validity, effectiveness or sufficiency hereof or of any document or security
furnished pursuant hereto. The Collateral Agent and its directors, officers,
employees, attorneys and agents shall be entitled to rely on any communication,
instrument or document believed by it or them to be genuine and correct and to
have been signed or sent by the proper person or persons. The Pledgor agrees to
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indemnify and hold harmless the Collateral Agent, the Holders and any other
Person from and against any and all costs, expenses (including the reasonable
fees and disbursements of counsel (including, the allocated costs of inside
counsel)), claims and liabilities incurred by the Collateral Agent, the Holders
or such Person hereunder, unless such claim or liability shall be due to willful
misconduct or gross negligence on the part of the Collateral Agent, the Holders
or such Person.
(b) The Pledgor acknowledges that the rights and responsibilities of the
Collateral Agent under this Agreement with respect to any action taken by the
Collateral Agent or the exercise or non-exercise by the Collateral Agent of any
option, right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Collateral
Agent and the Holders, be governed by the Indenture and by such other Agreements
with respect thereto as may exist from time to time among them, but, as between
the Collateral Agent and the Pledgor, the Collateral Agent shall be conclusively
presumed to be acting as agent for the Holders with full and valid authority so
to act or refrain from acting, and the Pledgor shall not be obligated or
entitled to make any inquiry respecting such authority.
Section 20.16 RESIGNATION OR REMOVAL OF THE COLLATERAL AGENT. Until such
time as the obligations shall have been paid in full, the Collateral Agent may
at any time, by giving written notice to the Pledgor and Holders, resign and be
discharged of the responsibilities hereby created, such resignation to become
effective upon (i) the appointment of a successor Collateral Agent and (ii) the
acceptance of such appointment by such successor Collateral Agent. As promptly
as practicable after the giving of any such notice, the Holders shall appoint a
successor Collateral Agent, which successor Collateral Agent shall be reasonably
acceptable to the Pledgor. If no successor Collateral Agent shall be appointed
and shall have accepted such appointment within 90 days after the Collateral
Agent gives the aforesaid notice of resignation, the Collateral Agent may apply
to any court of competent jurisdiction to appoint a successor Collateral Agent
to act until such time, if any, as a successor shall have been appointed as
provided in this Section 20.16. Any successor so appointed by such court shall
immediately and without further act be superseded by any successor Collateral
Agent appointed by the Holders, as provided in this Section 20.16.
Simultaneously with its replacement as Collateral Agent hereunder, the
Collateral Agent so replaced shall deliver to its successor all documents,
instruments, certificates and other items of whatever kind (including, without
limitation, the certificates and instruments evidencing the Pledged Collateral
and all instruments of transfer or assignment) held by it pursuant to the terms
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hereof. The Collateral Agent that has resigned shall be entitled to fees, costs
and expenses to the extent incurred or arising. or relating to events occurring.
before its resignation or removal.
Section 20.17 [Intentionally Omitted]
Section 20.18 RELEASE OF PLEDGED COLLATERAL; TERMINATION OF AGREEMENT.
(a) Subject to the provisions of Section 20.12 hereof, this Agreement shall
terminate upon the earlier of (i) full and final payment and performance of the
Obligations (and upon receipt by the Collateral Agent of the Pledgor's written
certification that all such Obligations have been satisfied) and payment in full
of all fees and expenses owing by the Pledgor to the Collateral Agent or (ii)
the day after the Legal Defeasance of all of the Obligations pursuant to Section
8.02 of the Indenture (other than those surviving Obligations specified
therein). At such time, the Collateral Agent shall, at the request of the
Pledgor, reassign and redeliver to the Pledgor all of the Pledged Collateral
hereunder that has not been sold, disposed of, retained or applied by the
Collateral Agent in accordance with the terms hereof. Such reassignment and
redelivery shall be without warranty by or recourse to the Collateral Agent,
except as to the absence of any prior assignments by the Collateral Agent of its
interest in the Pledged Collateral, and shall be at the expense of the Pledgor.
(b) The Pledgor agrees that it will not, except as permitted by the
Indenture, sell or dispose of, or grant any option or warrant with respect to,
any of the Pledged Collateral.
Section 20.19 FINAL EXPRESSION. This Agreement, together with any other
agreement executed in connection herewith, is intended by the parties as a final
expression of their Agreement and is intended as a complete and exclusive
statement of the terms and conditions thereof.
Section 20.20 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL; WAIVER OF DAMAGES.
(i) THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED UNDER THE LAWS OF
THE STATE OF NEW YORK, AND ANY DISPUTE ARISING OUT OF, CONNECTED WITH , RELATED
TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THE PLEDGOR, THE
COLLATERAL AGENT AND THE HOLDERS IN CONNECTION WITH THIS AGREEMENT, AND WHETHER
ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE
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WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAWS PROVISIONS) AND
DECISIONS OF THE STATE OF NEW YORK.
(ii) EXCEPT AS PROVIDED IN THE NEXT PARAGRAPH AND IN PARAGRAPH (vi) BELOW,
THE PLEDGOR, THE COLLATERAL AGENT AND THE HOLDERS AGREE THAT ALL DISPUTES
BETWEEN OR AMONG THEM ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL
TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT,
AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED
ONLY BY STATE OR FEDERAL COURTS LOCATED IN NEW YORK, NEW YORK, BUT THE PLEDGOR,
THE COLLATERAL AGENT AND THE HOLDERS ACKNOWLEDGE THAT ANY APPEALS FROM THOSE
COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK.
THE PLEDGOR WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE
LOCATION OF THE COURT CONSIDERING THE DISPUTE INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS.
(iii) THE PLEDGOR AGREES THAT THE COLLATERAL AGENT SHALL, IN ITS OWN NAME
OR IN THE NAME AND ON BEHALF OF ANY HOLDER, HAVE THE RIGHT, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST THE PLEDGOR OR ITS PROPERTY IN A
COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD FAITH TO ENABLE THE COLLATERAL
AGENT TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER
ENTERED IN FAVOR OF THE COLLATERAL AGENT. THE PLEDGOR AGREES THAT IT WILL NOT
ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY THE COLLATERAL
AGENT TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER
IN FAVOR OF THE COLLATERAL AGENT. THE PLEDGOR WAIVES ANY OBJECTION THAT IT MAY
HAVE TO THE LOCATION OF THE COURT IN WHICH THE COLLATERAL AGENT HAS COMMENCED A
PROCEEDING DESCRIBED IN THIS PARAGRAPH INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS.
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(iv) THE PLEDGOR, THE COLLATERAL AGENT AND THE HOLDERS EACH WAIVE ANY RIGHT
TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER GROUNDED IN
CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS
AGREEMENT. INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE RESOLVED IN A BENCH
TRIAL WITHOUT A JURY.
(v) THE PLEDGOR HEREBY IRREVOCABLY DESIGNATES CT CORPORATION AS THE
DESIGNEE, APPOINTEE AND AGENT OF THE PLEDGOR TO RECEIVE, FOR AND ON BEHALF OF
THE PLEDGOR, SERVICE OF PROCESS IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT. IT IS UNDERSTOOD THAT NOTICE AND A COPY OF SUCH PROCESS
SERVED ON SUCH AGENT, WILL BE FORWARDED PROMPTLY TO THE PLEDGOR, BUT THE FAILURE
OF THE PLEDGOR TO RECEIVE SUCH NOTICE AND COPY SHALL NOT AFFECT IN ANY WAY THE
SERVICE OF SUCH PROCESS. THE PLEDGOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE
OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO THE PLEDGOR AT ITS ADDRESS SET FORTH IN SECTION 11.02 OF THE
INDENTURE, SUCH SERVICE TO BECOME EFFECTIVE FIVE (5) BUSINESS DAYS AFTER SUCH
MAILING.
(vi) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT OR ANY
HOLDER OF NOTES TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE PLEDGOR IN ANY OTHER
JURISDICTION.
(vii) THE PLEDGOR HEREBY AGREES THAT NEITHER THE COLLATERAL AGENT NOR ANY
HOLDER OF NOTES SHALL HAVE ANY LIABILITY TO THE PLEDGOR (WHETHER GROUNDED IN
TORT, CONTRACT OR OTHERWISE) FOR LOSSES SUFFERED BY THE PLEDGOR IN CONNECTION
WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO, THE TRANSACTIONS CONTEMPLATED
AND THE RELATIONSHIP ESTABLISHED BY THIS AGREEMENT, OR ANY ACT, OMISSION OR
EVENT OCCURRING IN CONNECTION THEREWITH, UNTIL IT IS DETERMINED BY A FINAL AND
NONAPPEALABLE JUDGMENT OF A COURT THAT IS BINDING ON THE COLLATERAL AGENT OR
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SUCH HOLDER OF NOTES, AS THE CASE MAY BE, THAT SUCH LOSSES WERE THE RESULT OF
ACTS OR OMISSIONS ON THE PART OF THE COLLATERAL AGENT OR SUCH HOLDER OF NOTES,
AS THE CASE MAY BE, CONSTITUT1NG GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
(viii) THE PLEDGOR WAIVES ALL RIGHTS OF NOTICE AND HEARING OF ANY KIND
PRIOR TO THE EXERCISE BY THE COLLATERAL AGENT OR ANY HOLDER OF NOTES OF ITS
RIGHTS DURING THE CONTINUANCE OF AN EVENT OF DEFAULT TO REPOSSESS THE PLEDGED
COLLATED WITH JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY UPON THE PLEDGED
COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS. THE PLEDGOR WAIVES THE POSTING
OF ANY BOND OTHERWISE REQUIRED OF THE COLLATERAL AGENT OR ANY HOLDER OF NOTES IN
CONNECTION WITH ANY JUDICIAL PROCESS OR PROCEEDING TO OBTAIN POSSESSION OF,
REPLEVY, ATTACH OR LEVY UPON PLEDGED COLLATERAL OR OTHER SECURITY FOR THE
OBLIGATIONS, TO ENFORCE ANY JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF
THE COLLATERAL AGENT OR ANY HOLDER OF NOTES, OR TO ENFORCE BY SPECIFIC
PERFORMANCE, TEMPORARY RESTRAINING ORDER OR PRELIMINARY OR PAYMENT INJUNCTION
THIS AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT BETWEEN THE PLEDGOR, THE
COLLATERAL AGENT AND THE HOLDERS.
Section 20.21 ACKNOWLEDGMENTS. The Pledgor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement;
(b) neither the Collateral Agent (other than in its cash management
advisory role) nor any Holder of Notes has any fiduciary relationship to the
Pledgor, and the relationship between the Collateral Agent and the Holders, on
the one hand, and the Pledgor, on the other hand, is solely that of a secured
party and a creditor; and
(c) no joint venture exists among the Holders or among the Pledgor and the
Holders.
23
<PAGE>
IN WITNESS WHEREOF, the Pledgor and the Collateral Agent have each
caused this Agreement to be duly executed and delivered as of the date first
above written
PLEDGOR:
UNITED INTERNATIONAL HOLDINGS, INC.
a Delaware corporation
By: /s/ J. Timothy Bryan
-----------------------------------------
J. Timothy Bryan
Chief Financial Officer
COLLATERAL AGENT:
MORGAN STANLEY & CO. INCORPORATED
Collateral Agent
By: /s/ James J. Mahon
-----------------------------------------
Name: James J. Mahon
Title: Managing Director
24
<PAGE>
SCHEDULE I
----------
PLEDGED SHARES
--------------
ISSUER NUMBER OF SHARE CERTIFICATE PERCENTAGE OF
- ------ --------- ----------------- -------------
PLEDGED SHARES NUMBER OUTSTANDING
-------------- ------ -----------
Joint Venture, Inc. 100 Shares 2 100%
26
<PAGE>
EXHIBIT A
FORM OF INTER COMPANY NOTE
________ __, 19___
Denver, Colorado
NOTE
FOR VALUE RECEIVED, Joint Ventures, Inc., a Colorado corporation (the
"Maker"), promises to pay to United International Holdings, Inc., a Delaware
corporation (the "Company'), or order, the amount of principal advanced from
time to time the Company to such Maker as reflected on the books and records of
the Company, together with interest on the unpaid principal amount at a rate per
annum equal to [ ]%, from the date of advance to the date of payment. All
principal and accrued interest under this Note shall due and payable on demand.
This Note may be prepaid in whole or in part at any time without penalty or
premium.
The right to plead any and all statutes of limitations as a defense to
demand hereunder is hereby waived to the extent permitted by law. The Maker, for
itself and its successors assigns, waives presentment, demand, protest and
notice thereof or of dishonor, and waives the right to be released by reason of
any extension of time or change in the terms of payment or any change,
alteration or release of any security given for the payment hereof. The Maker
hereby acknowledges that this Note may be pledged by the Company to the
Collateral Agent named below.
This Note shall be governed by and construed in accordance with the laws of
the State of Colorado.
JOINT VENTURES, INC.
By: __________________________________
Title:
Pay to the Order of:
Morgan Stanley & Co. Incorporated,
as Collateral Agent
UNITED INTERNATIONAL HOLDINGS, INC.
By: _______________________________
Title:
27
FIRST AMENDMENT TO THE
AMENDED AND RESTATED PLEDGE AGREEMENT
THIS FIRST AMENDMENT TO THE AMENDED AND RESTATED PLEDGE AGREEMENT,
made and entered into as of February 5, 1998 (this "Agreement"), amends the
Amended and Restated Pledge Agreement (the "Original Agreement") made and
entered into as of November 22, 1995 by UNITED INTERNATIONAL HOLDINGS, INC., a
Delaware corporation (the "Pledgor"), having its principal office at 4643 South
Ulster Street, Denver, Colorado 80237, in favor of MORGAN STANLEY & CO.
INCORPORATED, as collateral agent (the "Collateral Agent"), having an office at
555 California Street, San Francisco, California 94104, for (i) the trustee (the
"1994 Trustee") under that certain indenture dated as of November 23, 1994 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "1994 Indenture"), pursuant to which the Pledgor issued $394.0 million
in aggregate principal amount of 14% Senior Secured Discount Notes due 1999
(together with any notes or debentures issued in replacement thereof or in
exchange or substitution therefore, the "1994 Notes"), (ii) the trustee (the
"1995 Trustee") under that certain indenture dated as of November 22, 1995 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "1995 Indenture" and, together with the 1994 Indenture, the "Existing
Indentures") pursuant to which the Pledgor issued $205.4 million in aggregate
principal amount of 14% Senior Secured Discount Notes due 1999 (together with
any notes or debentures issued in replacement thereof or in exchange or
substitution therefore, the "1995 Notes"), and (iii) the trustee (the "1998
Trustee") under that certain Indenture dated as of February 5, 1998 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"1998 Indenture"), pursuant to which the Pledgor issued its 10 3/4% Senior
Secured Notes due February 15, 2008 (together with any notes or debentures
issued in replacement thereof or in exchange or substitution therefore, the
"1998 Notes"). Capitalized terms issued and not defined herein shall have the
meanings given to such terms in the Indentures referred to below.
W I T N E S S E T H:
WHEREAS, the Pledgor is the legal and beneficial owner of (i) all of
the issued and outstanding shares of capital stock set forth on Schedule I to
the Original Agreement (the "Pledged Shares") of United International
Properties, Inc., a Colorado corporation and a direct wholly owned subsidiary of
Pledgor (the "Issuer"), and (ii) each intercompany promissory note issued by the
Issuer in favor of the Pledgor (the "Pledged Notes"), all of which Pledged Notes
shall be in the form of Exhibit A to the Original Agreement; and
WHEREAS, pursuant to the terms of the 1994 Indenture and the 1995
Indenture, the Pledgor is permitted to amend the Original Agreement with the
consent of 66.67% in principal amount of the 1994 Notes and the 1995 Notes then
outstanding; and
WHEREAS, the terms of the 1998 Indenture require that the Pledgor (i)
pledge to the Collateral Agent for the ratable benefit of the Holders, and grant
<PAGE>
to the Collateral Agent for the ratable benefit of the Holders, a security
interest in the Pledged Collateral (as defined in the Original Agreement) and
(ii) execute and deliver a pledge agreement in order to secure the payment and
performance by the Pledgor of all the Obligations of the Pledgor under the 1998
Indenture and the 1998 Notes (the "Obligations"); and
WHEREAS, the Pledgor wishes to amend the Original Agreement in order
to secure the payment and performance by the Pledgor of all the Obligations of
the Pledgor under the 1998 Indenture and the 1998 Notes on an equal and ratable
basis with the 1994 Notes and the 1995 Notes.
AGREEMENT
NOW, THEREFORE, in consideration of the premises, and in order to
induce the Holders of 1998 Notes to purchase such 1998 Notes, the Pledgor hereby
agrees with the Collateral Agent for its benefit and the ratable benefit of the
Holders as follows:
SECTION 1. PLEDGE. The Pledgor hereby pledges to the Collateral Agent
for its benefit and for the ratable benefit of the 1994 Trustee, the 1995
Trustee and the 1998 Trustee, and grants to the Collateral Agent for the ratable
benefit of the 1994 Trustee, the 1995 Trustee and the 1998 Trustee, a continuing
first priority security interest in all of its right and title in the "Pledged
Collateral" (as defined in the Original Agreement), and shall take all
reasonable action requested by the Collateral Agent to maintain the perfected
security interest in the Pledged Collateral.
SECTION 2. ORIGINAL AGREEMENT CONFIRMED AND RATIFIED. Except for the
changes provided herein, the Original Agreement is in all other respects hereby
approved, ratified and confirmed and remains in full force and effect in
accordance with its terms. The Pledgor hereby reaffirms and makes, as of the
date hereof, all of the representations, warranties in the Original Agreement,
as the same is amended hereby.
SECTION 3. SEVERABILITY. The provisions of this Agreement are
severable, and if any clause or provision shall be held invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such clause or
provision, or part thereof, and shall not in any manner affect such clause or
provision in any other jurisdiction or any other clause or provision of this
Agreement in any jurisdiction.
SECTION 4. HEADINGS. The headings of the Articles and Sections of this
Agreement have been inserted for convenience or reference only, are not to be
considered a part hereof and shall in no way modify or restrict any of the terms
or provisions hereof.
SECTION 5. COUNTERPART ORIGINALS. This Agreement may be signed in two
or more counterparts. Each signed copy shall be an original, but all of them
together represent one and the same agreement. Each counterpart may be executed
and delivered by telecopy, if such delivery is promptly followed by the original
manually signed copy sent by overnight courier.
2
<PAGE>
IN WITNESS WHEREOF, the Pledgor and the Collateral Agent have each
caused this Agreement to be duly executed and delivered as of the date first
above written.
PLEDGOR:
UNITED INTERNATIONAL HOLDINGS, INC.,
a Delaware corporation
By: /s/ J. Timothy Bryan
------------------------------------
J. Timothy Bryan
Chief Financial Officer
COLLATERAL AGENT:
MORGAN STANLEY & CO. INCORPORATED,
as Collateral Agent
By: /s/ James J. Mahon
------------------------------------
Name: James J. Mahon
Title: Managing Director
3
UNITED INTERNATIONAL HOLDINGS, INC.
$1,375,000,000 10.75% Senior Secured Discount Notes due 2008
NOTE PURCHASE AGREEMENT
January 30, 1998
Donaldson, Lufkin & Jenrette
Securities Corporation
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley Dean Witter
TD Securities (USA) Inc.
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Ladies and Gentlemen:
United International Holdings, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to Donaldson, Lufkin & Jenrette
Securities Corporation ("DLJ"), Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley Dean Witter and TD Securities (USA) Inc. (each, an
"Initial Purchaser" and, collectively, the "Initial Purchasers") an aggregate of
$1,375,000,000 in principal amount at maturity of its 10.75% Senior Secured
Discount Notes due 2008 (the "Senior Notes"), subject to the terms and
conditions set forth herein. The Senior Notes are to be issued pursuant to the
provisions of an indenture (the "Indenture") to be dated as of February 5, 1998
between the Company and Firstar Bank of Minnesota, N.A., as trustee (the
"Trustee"). The Senior Notes will be secured by a first priority lien on (i) all
of the Equity Interests, whether outstanding on the date of the Indenture or
thereafter issued, of United International Properties, Inc. ("UIPI"), which
collateral will be shared ratably with certain holders of the Company's existing
Indebtedness, as described in the Offering Memorandum (defined below), and of
Joint Venture, Inc. ("JVI"), each a Wholly Owned Restricted Subsidiary of the
Company and (ii) all intercompany notes of UIPI, which collateral will be shared
ratably with certain holders of the Company's existing Indebtedness, as
described in the Offering Memorandum, and of JVI, issued from time to time to
the Company (if any), and all proceeds thereof (collectively, the "Collateral")
pursuant to, in the case of UIPI-related collateral, an amended and restated
pledge agreement, dated as of November 22, 1995, as amended by the First
Amendment to be dated as of February 5, 1998, and in the case of JVI-related
collateral, a pledge agreement (collectively, the "Pledge Agreements"), to be
dated as of February 5, 1998, by and between the Company and Morgan Stanley &
Company Inc., as collateral agent (in such capacity, the "Collateral Agent").
Capitalized terms used herein and not otherwise defined are used
herein as defined in the Offering Memorandum.
<PAGE>
1. OFFERING MEMORANDUM. The Senior Notes will be offered and sold to
the Initial Purchasers pursuant to one or more exemptions from the registration
requirements under the Securities Act of 1933, as amended (the "ACT"). The
Company has prepared a preliminary offering memoran dum, dated January 14, 1998
(the "PRELIMINARY OFFERING MEMORANDUM") and a final offering memoran dum, dated
January 30, 1998 (the "OFFERING MEMORANDUM"), relating to the Senior Notes.
Upon original issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Act, the Senior Notes
(and all securities issued in exchange therefor or in substitution thereof)
shall bear the following legend:
"THIS SENIOR NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE SECOND
SENTENCE HEREOF. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE HOLDER (1) REPRE SENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT)(A "QIB"), (B) IT IS ACQUIRING THIS SENIOR NOTE IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT
OR (C) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN
RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES
ACT (AN "IAI"), (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE
TRANSFER THIS SENIOR NOTE EXCEPT (A) TO THE COMPANY OR ANY OF ITS
SUBSIDIAR IES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS
A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE
TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE
SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH
TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREE MENTS RELATING TO THE TRANSFER OF THIS
SENIOR NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND,
IF SUCH TRANS FER IS IN RESPECT OF AN AGGREGATE ACCRETED VALUE OF
SENIOR NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO
THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES
ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
2
<PAGE>
OTHER APPLICABLE JURISDICTION AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS SENIOR NOTE OR AN INTEREST HEREIN IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE
THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE
SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS SENIOR NOTE IN
VIOLATION OF THE FOREGOING."
The Initial Purchasers have advised the Company that the Initial
Purchasers will make offers (the "Exempt Resales") of the Senior Notes purchased
hereunder on the terms set forth in the Offering Memorandum, as amended or
supplemented, solely to persons whom the Initial Purchasers reasonably believe
to be "qualified institutional buyers," as defined in Rule 144A under the Act
("QIBs") and to persons permitted to purchase the Senior Notes in offshore
transactions in reliance upon Regulations S under the Act (each a "Regulation S
Purchaser"). The QIBs and Regulation S Purchasers who purchase the Senior Notes
from the Initial Purchasers in the initial placement thereof are referred to
herein as the "Eligible Purchasers." The Initial Purchasers will offer the
Senior Notes to Eligible Purchasers initially at a price equal to 59.069% of the
principal amount at maturity thereof. Such price may be changed by the Initial
Purchasers at any time without notice.
Holders (including subsequent transferees) of the Senior Notes will
have the registration rights set forth in the registration rights agreement (the
"Registration Rights Agreement"), to be dated as of February 5, 1998, in
substantially the form of Exhibit A hereto, for so long as such Senior Notes
constitute "Transfer Restricted Notes" (as defined in the Registration Rights
Agreement). Pursuant to the Registration Rights Agreement, the Company will
agree to file with the Securities and Exchange Commission (the "COMMISSION"),
under the circumstances and on the terms set forth therein, (i) a registration
statement under the Act (the "Exchange Offer Registration Statement") relating
to the Company's Senior Secured Discount Notes due 2008 (the "Exchange Notes"
and together with the Senior Notes, the "Notes"), to be offered in exchange for
the Senior Notes (the "Exchange Offer") and (ii) a shelf registration statement
pursuant to Rule 415 under the Act (the "Shelf Registration Statement" and,
together with the Exchange Offer Registration Statement, the "Registration
Statements") relating to the resale by certain holders of the Senior Notes, and
to use its best efforts to cause such Registration Statements to be declared
effective.
This Purchase Agreement (this "Agreement"), the Supplemental
Indentures to be dated February 5, 1998, to the indentures governing the terms
of the Existing Notes (as defined in the Offering Memorandum), the Indenture,
the Notes, the Pledge Agreements and the Registration Rights Agreement are
hereinafter referred to collectively as the "Transaction Documents."
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
representations and warranties contained in this Agreement, and subject to its
terms and conditions, the Company agrees to issue and sell to the Initial
Purchasers, and the Initial Purchasers agree severally and not jointly to
purchase from the Company the principal amounts at maturity of Senior Notes set
3
<PAGE>
forth opposite the name of such Initial Purchaser on Exhibit B hereto at a
purchase price equal to 57.740% of the principal amount at maturity thereof (the
"Purchase Price").
3. DELIVERY AND PAYMENT. Delivery to the Initial Purchasers of, and
payment for, the Senior Notes shall be made at 9:00 a.m. New York City time, on
February 5, 1998 (the "Closing Date"), at the offices of Skadden, Arps, Slate,
Meagher & Flom LLP at 919 3rd Avenue, New York, New York 10022, or such other
time or place as you and the Company shall designate.
The Senior Notes in global or definitive form shall be registered in
such names and issued in such denominations as you shall request in writing not
later than two full business days prior to the Closing Date, and shall be made
available to the Initial Purchasers for inspection not later than 9:30 A.M., New
York City time, on the business day next preceding the Closing Date. The Senior
Notes shall be delivered to you on the Closing Date with any transfer taxes
payable upon initial issuance thereof duly paid by the Company, for your
respective accounts against payment of the Purchase Price by wire-transfer,
certified or official bank check or checks payable in New York Clearing House or
similar next-day funds to the order of the Company.
4. AGREEMENTS OF THE COMPANY. The Company agrees with the Initial
Purchasers as follows:
a. To advise the Initial Purchasers promptly and, if requested by
the Initial Purchasers, confirm such advice in writing, (i) of the issuance by
any state securities commission of any stop order suspending the qualification
or exemption from qualification of any Senior Notes for offering or sale in any
jurisdiction, or the initiation of any proceeding for such purpose by any state
securities commission or other regulatory authority and (ii) of any change in
the Company's condition (financial or otherwise), business, proposals,
properties, net worth or results of operations or the happening of any event
that makes any statement of a material fact made in the Preliminary Offering
Memorandum or the Offering Memorandum untrue or that requires the making of any
additions to or changes in the Preliminary Offering Memorandum or the Offering
Memorandum in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Company shall use
its best efforts to prevent the issuance of any stop order or order suspending
the qualification or exemption of any Senior Notes under any state securities or
Blue Sky laws and, if at any time any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption of any Senior Notes under any state securities or Blue Sky laws, the
Company shall use its best efforts to obtain the withdrawal or lifting of such
order at the earliest possible time.
b. To furnish the Initial Purchasers, without charge, with as many
copies of the Preliminary Offering Memorandum and the Offering Memorandum, and
any amendments or supple ments thereto, as the Initial Purchasers may reasonably
request. The Company consents to the use of the Preliminary Offering Memorandum
and the Offering Memorandum, and any amendments and supplements thereto, by the
Initial Purchaser in connection with offers or sales of the Senior Notes.
c. Not to amend or supplement the Offering Memorandum prior to the
Closing Date, unless you shall previously have been advised thereof and shall
not have objected thereto after being furnished a copy thereof. The Company
4
<PAGE>
shall promptly prepare, upon your request, any amendment or supplement to the
Offering Memorandum that may be necessary or advisable in connection with Exempt
Resales.
d. If, after the date hereof, any event shall occur as a result of
which, in the reasonable judgment of the Company or in the reasonable judgment
of the Initial Purchasers or their counsel, it becomes necessary to amend or
supplement the Offering Memorandum in order to make the statements therein, in
the light of the circumstances when the Offering Memorandum is delivered to an
Eligible Purchaser, not misleading, or if it is necessary to amend or supplement
the Offering Memorandum to comply with applicable law, forthwith to prepare an
appropriate amendment or supplement to the Offering Memorandum so that the
statements therein as so amended or supplemented will not, in the light of the
circumstances when it is so delivered, be misleading, or so that the Offering
Memorandum will comply with applicable law.
e. To cooperate with you and your counsel in connection with the
qualification of the Securities under the securities or Blue Sky laws of such
jurisdictions as you may request and to continue such qualification in effect
for as long as may be necessary to complete the distribution of the Exempt
Resales; PROVIDED, HOWEVER, that the Company shall not be required in connection
therewith to register or qualify as a foreign corporation where it is not now so
qualified or to take any action that would subject it to the service of process
in suits or taxation, other than as to matters and transactions relating to the
Exempt Resales, in any jurisdiction where it is not now so subject.
f. Whether or not the transactions contemplated by this Agreement
are consummated or this Agreement becomes effective or is terminated, to pay all
costs, expenses, fees and taxes incident to and in connection with: (i) the
printing, processing, filing, distribution and delivery of the Offering
Memorandum (including, without limitation, financial statements and exhibits)
and all amendments and supplements thereto, (ii) the printing, processing,
execution, distribution and delivery of this Agreement, the other Transaction
Documents, any memoranda describing state securities or Blue Sky laws and all
other agreements, memoranda, correspondence and other documents printed,
distributed and delivered in connection herewith and with the offer or sale of
the Senior Notes, (iii) the issuance and delivery by the Company of the Senior
Notes, (iv) the qualification of the Senior Notes for offer and sale under the
securities or Blue Sky laws of the several states (including, without
limitation, the fees and disbursements of your counsel relating to such
registration or qualification and memoranda relating thereto and any filing fees
in connection therewith), (v) furnishing such copies of the Offering Memorandum,
and all amend ments and supplements thereto, as may be reasonably requested for
use in connection with Exempt Resa1es, (vi) the preparation of certificates for
the Senior Notes (including, without limitation, printing and engraving
thereof), (vii) the fees, disbursements and expenses of the Company's counsel
and accountants, all expenses and listing fees in connection with the
application for quotation of the Senior Notes in the National Association of
Securities Dealers, Inc. ("NASD") Automated Quotation System - PORTAL
("PORTAL"), (ix) all fees and expenses (including fees and expenses of counsel)
of the Company in connection with approval of the Senior Notes by DTC for
"book-entry" transfer, (x) the performance by the Company of its other
obligations under this Agreement and the other Transaction Documents and (xi)
the rating of the Senior Notes by investment rating agencies.
5
<PAGE>
g. To use the proceeds from the sale of the Senior Notes in the
manner described in the Offering Memorandum under the caption "Use of Proceeds."
h. Not to claim voluntarily, and to resist actively any attempts
to claim, the benefit of any usury laws against the holders of any Senior Notes.
i. To do and perform all things required to be done and performed
under this Agreement by it on, prior to, or after the Closing Date and to use
its best efforts to satisfy all conditions precedent on its part to the delivery
of the Senior Notes.
j. Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act), other
than the Senior Notes, in a manner that would require the registration under the
Act of the sale to Initial Purchasers or Eligible Purchasers of the Senior
Notes.
k. For so long as any of the Securities remain outstanding and
during any period in which the Company is not subject to Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), to make
available to any holder and any prospective purchaser of such Notes from such
holder, the information required by Rule l 44A(d)(4) under the Act.
l. Except as otherwise permitted under the Act, it will not, and
will not authorize or permit any person acting on its behalf to, solicit any
offer to buy or offer to sell the Notes by means of any form of general
solicitation or general advertising (as such terms are used in Regulation D
under the Act) or in any manner involving a public offering within the meaning
of Section 4(2) of the Act.
m. To use its best efforts to cause the Exchange Offer to be made
on the appropriate form to permit registration of the Exchange Notes to be
offered in exchange for the Senior Notes and to comply with all applicable
Federal and state securities laws in connection with the Exchange Offer.
n. To comply with all of its agreements set forth in the
Transaction Documents, and all agreements set forth in the representation letter
of the Company to DTC relating to the approval of the Senior Notes by DTC for
"book-entry" transfer.
o. To use its best efforts to effect the inclusion of the Senior
Notes in PORTAL.
p. During a period of five years following the date of this
Agreement, to deliver to each of you promptly upon their becoming available,
copies of all current, regular and periodic reports filed by the Company with
the Commission or any securities exchange or with any governmental authority
succeeding to any of the Commission's functions.
q. If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to Section
9 hereof) or if this Agreement shall be terminated by the Initial Purchasers
because of any failure or refusal on the part of the Company to comply with the
terms or fulfill any of the conditions of this Agreement, the Company agrees to
reimburse the Initial Purchasers for all out-of-pocket expenses (including fees
6
<PAGE>
and expenses of counsel) for those reasonably incurred by the Initial Purchasers
in connection with the matters covered by this Agreement.
5. REPRESENTATIONS AND WARRANTIES.
(a) The Company represents and warrants to each of the Initial
Purchasers that:
a. The Preliminary Offering Memorandum and the Offering Memorandum
have been prepared in connection with and in contemplation of the Exempt
Resales. The Preliminary Offering Memorandum and the Offering Memorandum do not,
and any supplement or amendment thereto, if any, prepared by the Company will
not, contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that the
representations and warranties contained in this paragraph (i) shall not apply
to statements in or omissions from the Preliminary Offering Memorandum and the
Offering Memorandum (or any supplement or amendment thereto) made in reliance
upon and in confor mity with information relating to you furnished to the
Company in writing by you expressly for use therein. The Company acknowledges
for all purposes under this Agreement that the statements set forth in the last
paragraph on the cover page, the stabilization legend appearing as the bold
paragraph on page 2 and in the third full paragraph and the fourth sentence of
the seventh paragraph, the tenth paragraph and the eleventh paragraph appearing
under the caption "Plan of Distribution" in the Preliminary Offering Memorandum
and the Offering Memorandum constitute the only written information furnished to
the Company by you expressly for use in the Preliminary Offering Memorandum and
the Offering Memorandum (or any amendment or supplement thereto) pertaining to
any arrangement or agreement with respect to any party other than you. No stop
order preventing the use of the Preliminary Offering Memorandum and the Offering
Memorandum, or any amendment or supplement thereto, or any order asserting that
any of the transactions contemplated by this Agreement are subject to the
registration requirements of the Act or the applicable laws of any other
jurisdiction, has been issued.
b. When the Senior Notes are issued and delivered pursuant to this
Agreement, none of the Senior Notes will be of the same class (within the
meaning of Rule 144A under the Act) as securities of the Company that are listed
on a national securities exchange registered pursuant to the Exchange Act or
that are quoted in a United States automated inter dealer quotation system.
c. All the outstanding shares of capital stock of the Company have
been duly authorized and validly issued, are fully paid and nonassessable and
are free of any preemptive or similar rights; the capital stock of the Company
conforms in all material respects to the description thereof in the Preliminary
Offering Memorandum and the Offering Memorandum; and the Company's ownership
interest with respect to each of the corporations and partnerships (including
its Restricted Affiliates) in which the Company has a direct or indirect
investment (each a "Subsidiary" and, collectively, the "Subsidiaries") is in all
material respects as described in the Preliminary Offering Memorandum and the
Offering Memorandum and the descriptions of contracts and agreements set forth
therein are accurate and complete in all material respects.
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d. The Company has all necessary corporate power and authority to
execute and deliver this Agreement and the other Transaction Documents and to
perform its obligations under this Agreement and the other Transaction Documents
and to authorize, issue, sell and deliver the Notes as contemplated by this
Agreement and to perform its obligations thereunder, as applicable.
e. The Indenture and the Supplemental Indentures have been duly
authorized by the Company and, when executed and delivered at the Closing, will
be valid and legally binding agreements of the Company, enforceable against the
Company in accordance with their terms. The Indenture, when executed and
delivered, will conform to the description thereof in the Offering Memorandum.
f. The Senior Notes have been duly authorized by the Company and,
on the Closing Date, will have been duly executed by the Company and will
conform in all materials respects to the descriptions thereof in the Offering
Memorandum. When the Senior Notes are issued, authenti cated and delivered in
accordance with the Indenture and paid for in accordance with the terms of this
Agreement, the Senior Notes will constitute valid and legally binding
obligations of the Company, enforceable against the Company in accordance with
their terms and entitled to the benefits of the Indenture.
g. The Exchange Notes have been duly and validly authorized for
issuance by the Company, and when issued and authenticated in accordance with
the terms of the Indenture and the Registration Rights Agreement will be valid
and legally binding obligations of the Company, enforceable against the Company
in accordance with their terms and entitled to the benefits of the Indenture.
h. The Registration Rights Agreement has been duly and validly
authorized by the Company and, when duly executed and delivered by the Company,
will be the valid and legally binding obligation of the Company enforceable
against the Company in accordance with its terms. The Registration Rights
Agreement, when executed and delivered, will conform to the description thereof
in the Offering Memorandum.
i. The Company is a corporation duly organized and validly
existing in good standing under the laws of the State of Delaware with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Preliminary Offering Memorandum and the
Offering Memorandum, and is duly registered and qualified to conduct its
business and is in good standing in each jurisdiction or place where the nature
of its properties or the conduct of its business requires such registration or
qualification, except where the failure to so register or qualify does not have
a material adverse effect on the condition (financial or other), business,
properties, net worth or results of operations of the Company and the
Subsidiaries taken as a whole. Such an effect, either singly or in the
aggregate, is referred to in this Agreement as a "Material Adverse Effect" and
the word "material" shall have a corresponding meaning.
j. The Subsidiaries that were "significant subsidiaries" (as such
term is defined in Rule 1-02(w) of Regulation S-X) as of February 28, 1997 are
listed in the list of subsidiaries included as an exhibit to the Company's
Annual Report on Form 10-K which is incorporated by reference into the Offering
Memorandum. Each Subsidiary is a corporation or other legal entity duly
organized, validly existing and in good standing in the jurisdiction of its
formation, with full power and authority to own, lease and operate its
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properties and to conduct its business as described in the Offering Memorandum,
and is duly registered and qualified to conduct its business and is in good
standing in each jurisdiction or place where the nature of its properties or the
conduct of its business requires such registration or qualification, except
where the failure so to register or qualify does not have a Material Adverse
Effect; except as set forth in the Offering Memorandum, all the outstanding
shares of capital stock or other equity interests of each of the Subsidiaries
have been duly authorized and validly issued, are fully paid and nonassessable,
and are owned by the Company directly or indirectly through one of the other
Subsidiaries, free and clear of any material lien, adverse claim, security
interest, equity or other encumbrance.
k. There is (A) no legal, regulatory or governmental action, suit
or proceeding before or by any court, arbitrator or governmental agency, body or
official, domestic or foreign, now pending or, to the knowledge of the Company,
threatened or contemplated to which the Company or any of the Subsidiaries is a
party or to which the business or property of the Company or any of the
Subsidiaries is subject, (B) no statute, rule, regulation or order that has been
enacted, adopted or issued by any govern mental agency or that has been proposed
by any governmental body, (C) no injunction, restraining order or order of any
nature by a federal or state court or foreign court of competent jurisdiction to
which the Company or any of the Subsidiaries is subject issued that, in the case
of clauses (A), (B) and (C) above, (x) might, singly or in the aggregate, result
in a Material Adverse Effect, (y) would interfere with or adversely affect the
issuance of the Notes or (z) in any manner draw into question the validity of
this Agreement or the other Transaction Documents.
l. Neither the Company nor any of the Subsidiaries is in violation
of its certificate or articles of incorporation or by-laws or other
organizational documents, or in material violation of any law, ordinance,
administrative or governmental rule or regulation applicable to the Company or
any of the Subsidiaries or of any decree of any court or governmental agency or
body having jurisdiction over the Company or any of the Subsidiaries, or in
default in any material respect in the performance of any obligation, agreement
or condition contained in any bond, debenture, note or any other evidence of
indebtedness or in any material agreement, indenture, lease or other instrument
to which the Company or any of the Subsidiaries is a party or by which any of
them or any of their respective properties may be bound.
m. Neither the issuance and sale of the Notes, the execution and
delivery by the Company of the Transaction Documents, the performance of this
Agreement, the Indenture, the Supplemental Indentures, the Pledge Agreements and
the Registration Rights Agreement by the Company, nor the consummation by the
Company of the transactions contemplated hereby and thereby (i) requires any
consent, approval, authorization or other order of or registration or filing
with, any court, regulatory body, administrative agency or other governmental
body, agency or official except such as have been obtained and made (or, in the
case of the Registration Rights Agreement, will be obtained and made under the
Act, the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"),
and United States state securities or Blue Sky laws and regulations or such as
may be required by the NASD), (ii) conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, the certificate
or articles of incorporation or bylaws, or other organizational documents, of
the Company or any of the Subsidiaries, (iii) conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, any agreement,
indenture, lease or other instrument to which the Company or any of the
Subsidiaries is a party or by which any of them or any of their respective
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properties may be bound or (iv) violates or will violate any statute, law,
regulation or filing or judgment, injunction, order or decree applicable to the
Company or any of the Subsidiaries or any of their respective properties, or
will result in the creation or imposition of any lien, charge or encum brance
upon any property or assets of the Company (other than in favor of the Holders)
or any of the Subsidiaries pursuant to the terms of any agreement or instrument
to which any of them is a party or by which any of them may be bound or to which
any of the property or assets of any of them is subject, except in each case
where failure to obtain such consents, approvals, authorizations or orders or
make such registrations or filings or where such conflicts or violations will
not individually or in the aggregate have a Material Adverse Effect.
n. The accountants, Arthur Andersen LLP and KPMG Accountants N.V.,
each of which has audited certain of the financial statements that are included
or summarized in the Offering Memorandum, are independent certified public
accountants under Rule 101 of the AICPA's Code of Professional Conduct and its
interpretations and rulings. The financial statements, together with related
schedules and notes, included in the Preliminary Offering Memorandum and the
Offering Memoran dum (and any amendment or supplement thereto) present fairly
the respective financial positions, results of operations and changes in
financial positions of the Company and each Subsidiary, in each case, for which
such financial statements are so included, on the basis stated in the
Preliminary Offering Memorandum and the Offering Memorandum at the respective
dates or for the respective periods to which they apply; such financial
statements and related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein; and the other financial and
statistical information and data included in the Preliminary Offering Memorandum
and the Offering Memorandum (and any amendment or supplement thereto) are
accurately presented in all material respects and prepared on a basis consistent
with such financial statements and the books and records of the Company and the
Subsidiaries.
o. The financial statements, included in the Preliminary Offering
Memorandum and the Offering Memorandum (and any amendment or supplement
thereto), present fairly the respective financial positions, results of
operations and changes in financial positions of (i) the Company and (ii) each
Subsidiary, in each case, for which such financial statements are so included,
on the basis stated in the Preliminary Offering Memorandum and the Offering
Memorandum at the respective dates or for the respective periods to which they
apply; such financial statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; the other financial and statistical information and data included in
the Preliminary Offering Memorandum and the Offering Memorandum (and any
amendment or supplement thereto) are accurately presented in all material
respects and prepared on a basis consistent with such financial statements and
the books and records of the Company and the Subsidiaries; and the pro forma
financial statements and "as adjusted" financial information and the related
notes thereto included in the Preliminary Offering Memorandum and the Offering
Memorandum have been prepared in accordance with the applicable requirement of
the Act (as though the Offering Memorandum were a prospectus included in a
registration statement filed pursuant to the Act) and on the bases described
therein and, in the opinion of the Company, the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances referred to
therein.
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p. The execution and delivery of, and the performance by the
Company of its obligations under, this Agreement have been duly and validly
authorized by the Company, and this Agreement has been duly executed and
delivered by the Company and constitutes the valid and legally binding agreement
of the Company, enforceable against the Company in accordance with its terms,
except as rights to indemnity and contribution hereunder or thereunder may be
limited by federal or state securities laws.
q. Except as disclosed in the Preliminary Offering Memorandum or
the Offering Memorandum (or any amendment or supplement thereto), subsequent to
the respective dates as of which such information is given in the Preliminary
Offering Memorandum and the Offering Memoran dum (or any amendment or supplement
thereto), neither the Company nor any of the Subsidiaries has incurred any
liability or obligation, direct or contingent or entered into any transaction,
not in the ordinary course of business, that is material to the Company on a
consolidated basis, and there has not been any change in the capital stock or
material increase in the short-term debt or long-term debt of the Company, any
of the Subsidiaries, or any change or any development that has, or that may
reasonably be expected to have, a Material Adverse Effect, or any discovery of
any change or development that may be reasonably expected to have any such
Material Adverse Effect.
r. Except as is not material, each of the Company and each
Subsidiary has good and marketable title to all property (real and personal)
described in the Preliminary Offering Memoran dum and the Offering Memorandum as
being owned by it, free and clear of all liens, claims, security interests or
other encumbrances (except such as are described in the Preliminary Offering
Memoran dum and the Offering Memorandum and all the property described in the
Prospectus as being held under lease by each of the Company and the Subsidiaries
is held by it under valid, subsisting and enforceable leases).
s. Each of the Company and each Subsidiary has such material
permits, licenses, franchises and authorizations of governmental or regulatory
authorities ("permits") as are necessary to own its respective properties and to
conduct its respective business in the manner described in the Preliminary
Offering Memorandum and the Offering Memorandum, subject to such qualifications
as may be set forth in the Preliminary Offering Memorandum and the Offering
Memorandum; each of the Company and each Subsidiary has fulfilled and performed
all its material obligations with respect to such permits and no event has
occurred that allows, or after notice or lapse of time would allow, revocation
or termination thereof or result in any other material impairment of the rights
of the holder of any such permit, subject in each case to such qualification as
may be set forth in the Preliminary Offering Memorandum and the Offering
Memorandum; and, except as described in the Preliminary Offering Memorandum and
the Offering Memorandum, none of such permits contains any restriction that is
materially burdensome to the Company or any of the Subsidiaries. The
descriptions contained in the Preliminary Offering Memorandum and the Offering
Memorandum of statutes, rules, regulations and other laws applicable to the
Company and the Subsidiaries are accurate and complete in all material respects.
t. The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
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accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
u. No action has been taken and no statute, rule or regulation or
order has been enacted, adopted or issued by any governmental agency that
prevents the issuance of the Notes; no injunction, restraining order or order of
any nature by a federal or state court of competent jurisdiction has been issued
that prevents the issuance of the Notes or suspends the sale of the Notes in any
jurisdiction referred to in Section 4(e) hereof, and no action, suit or
proceeding is pending affecting or, to the knowledge of the Company, threatened
against the Company or any of the Subsidiaries before any court or arbitrator or
any governmental body, agency or official which, if adversely determined, would
prohibit, interfere with or adversely affect the issuance or marketability of
the Notes or in any manner draw into question the validity of any of the
Transaction Documents; and every request of the Company by any securities
authority or agency of any jurisdiction for additional information has been
complied with in all material respects.
v. To the Company's knowledge, neither the Company nor any of its
Subsidiaries nor any employee, agent, co-investor or partner of the Company or
any Subsidiary has made any payment of funds of the Company or any Subsidiary or
received or retained any funds in violation of any law, rule or regulation,
which payment, receipt or retention of funds is of a character required to be
disclosed in the Offering Memorandum.
w. No registration under the Act of the Senior Notes is required
for the sale of the Senior Notes to the Initial Purchasers as contemplated
hereby or for Exempt Resales to the Eligible Purchasers, assuming (A) that the
persons who buy the Senior Notes in the Exempt Resales are Eligible Purchasers
and (B) the accuracy of the Purchaser's representations regarding the absence of
general solicitation in connection with the sale of the Senior Notes to the
Initial Purchasers and the Exempt Resales described herein. No form of general
solicitation or general advertising was used by the Company or any of its
representatives in connection with the offer and sale of any of the Senior Notes
or in connection with Exempt Resales, including, but not limited to, articles,
notices or other communications published in any newspaper, magazine, or similar
medium or broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising.
No securities of the same class as the Senior Notes have been issued and sold by
the Company within the six-month period immediately prior to the date hereof.
x. The Offering Memorandum, as of its date, and each amendment or
supplement thereto, as of its date, contains all the information specified in,
and meets the requirements of; Rule 144A(d)(4) under the Act.
y. Each of the Company and each Subsidiary has filed all material
tax returns required to be filed, which returns are complete and correct in all
material respects, and neither the Company nor any Subsidiary is in default in
the payment of any taxes which were payable pursuant to said returns or any
assessments with respect thereto.
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z. The Company and the Subsidiaries own or possess all material
patents, trademarks, trademark registrations, service marks, service mark
registrations, trade names, copy rights, licenses, inventions, trade secrets and
rights described in the Preliminary Offering Memorandum and the Offering
Memorandum as being owned by them or any of them or necessary for the conduct of
their respective businesses, and the Company is not aware of any claim to the
contrary or any challenge by any other person to the rights of the Company and
the Subsidiaries with respect to the foregoing.
aa. The Company is not now, and after the sale of the Senior Notes
to be sold by it hereunder and the application of the proceeds from such sale as
described in the Offering Memorandum under the caption "Use of Proceeds" will
not be, an "investment company" within the meaning of the Investment Company Act
of 1940, as amended.
bb. The Company has complied with all provisions of Florida H.B.
1771 codified as Section 517.075 of the Florida statutes, and all regulations
promulgated thereunder, relating to issuers doing business with the Government
of Cuba or with any person or any affiliate located in Cuba.
cc. Except as described in the Preliminary Offering Memorandum and
the Offering Memorandum, there are no outstanding options, warrants or other
rights calling for the issuance of, or any commitment, plan or arrangement to
issue, any shares of capital stock of the Company or any security convertible
into or exchangeable or exercisable for capital stock of the Company.
dd. Except as described in the Preliminary Offering Memorandum and
the Offering Memorandum, there is no holder of any security of the Company or
any other person who has the right, contractual or otherwise, to cause the
Company to sell or otherwise issue to them, or to permit them to underwrite the
sale of, the Notes or the right to have any other securities of the Company
included in the registration statement or the right to require registration
under the Act of any securities of the Company because of the execution by the
Company of this Agreement or consummation of the transactions contemplated by
this Agreement or otherwise.
ee. Except as set forth in the Offering Memorandum, the Company
has no commitments to fund entities that do not constitute Subsidiaries.
ff. None of the Company, any Subsidiary or any agent thereof
acting on the behalf of either of them has taken, and none of them will take,
any action that might cause this Agreement or the issuance or sale of the Notes
pursuant to the terms of this Agreement to violate Regulation G (12 C.F.R. Part
207), Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or
Regula tion X (12 C.F.R. Part 224) of the Board of Governors of the Federal
Reserve System, in each case as in effect now or as the same may hereafter be in
effect on the Closing Date.
gg. The Pledge Agreements have been duly authorized, and when
executed and delivered by the Company will be a valid and legally binding
agreements of the Company, enforceable against the Company in accordance with
their terms. The Pledge Agreements, when executed and delivered, will conform in
all material respects to the description thereof in the Preliminary Offering
Memorandum and the Offering Memorandum.
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hh. The Collateral has been,or on or prior to the Closing Date
will have been, delivered to the Collateral Agent and assuming the Collateral
Agent is holding the certificates and notes representing the Collateral in the
State of New York the Pledge Agreements will create a valid and perfected
security interest in the Collateral in favor of the Collateral Agent, on behalf
and for the benefit of the holders of the Senior Notes, each such security
interest having such priority as to the Collateral as is set forth in the
Offering Memorandum and no filings or recordings are required in order to
perfect the security interest created under the Pledge Agreement in the
Collateral.
ii. The Company owns 100% of the Equity Interests or other
securities evidencing equity ownership of UIPI and JVI, free and clear of any
security interest, claim, lien or encumbrance (except for the pledge pursuant to
the Pledge Agreements as set forth in the Offering Memorandum); and all of such
securities have been duly authorized, validly issued and are fully paid and
nonassess able. There are no outstanding rights, warrants or options to acquire,
or instruments convertible into or exchangeable for, any such shares of capital
stock or other equity interest of UIPI or JVI.
jj. All of the Equity Interests of UIPI and of JVI and all
intercompany notes of UIPI and of JVI issued to the Company are owned by the
Company free and clear of any security interest, claim, lien or encumbrance
(except for the existing pledge pursuant to the Amended and Restated Pledge
Agreement dated November 22, 1995, as amended).
The Company acknowledges that the Initial Purchasers and, for purposes
of the opinions to be delivered to the Initial Purchasers pursuant to Section 7
hereof, counsel to the Company and counsel to the Initial Purchasers, will rely
upon the accuracy and truth of the foregoing representations and hereby consents
to such reliance.
(b) The Initial Purchasers severally represent and warrant to the
Company and agree that:
a. Each of the Initial Purchasers is a QIB, with such knowledge
and experience in financial and business matters as are necessary in order to
evaluate the merits and risks of an invest ment in the Senior Notes.
b. The Initial Purchasers (A) are not acquiring the Senior Notes
with a view to any distribution thereof that would violate the Act or the
securities laws of any state of the United States or any other applicable
jurisdiction and (B) will be reoffering and reselling the Senior Notes only to
Eligible Purchasers that the Initial Purchasers reasonably believe are QIBs in
reliance on the exemption from the registration requirements of the Act and in
offshore transactions in reliance on Regulation S under the Act.
c. No form of general solicitation or general advertising has been
or will be used by the Initial Purchasers or any of its representatives in
connection with the offer and sale of any of the Senior Notes, which would
render unavailable to the Company reliance upon the exemption from the
registration requirements of the Act afforded by Section 4(2) thereof,
including, but not limited to, articles, notices or other communications
published in any newspaper, magazine, or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have been invited
by any general solicitation or general advertising.
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d. Each of the Initial Purchasers agrees that, in connection with
the Exempt Resales, it will solicit offers to buy the Senior Notes only from,
and will offer to sell the Senior Notes only to, Eligible Purchasers. Such
Initial Purchasers further agree (a) that they will offer to sell the Senior
Notes only to, and will solicit offers to buy the Senior Notes only from
Eligible Purchasers that the Initial Purchasers reasonably believe are QIBs and
Regulation S Purchasers in each case, that agree that (x) the Senior Notes
purchased by them may be resold, pledged or otherwise transferred within the
time period referred to under Rule 144(k) (taking into account the provisions of
Rule 144(d) under the Act, if applicable) under the Act, as in effect on the
date of the transfer of such Senior Notes, only (I) to the Company or any of its
subsidiaries, (II) to a person whom the seller reasonably believes is a QIB
purchasing for its own account or for the account of a QIB in a transaction
meeting the requirements of Rule 144A under the Act, (III) in an offshore
transaction (as defined in Rule 902 under the Act) meeting the requirements of
Rule 903 or Rule 904 of the Act, (IV) in a transaction meeting the requirements
of Rule 144 (if available) under the Act, (V) to an institutional "accredited
investor" that, prior to such transfer, furnishes the Trustee a signed letter
containing certain representations and agreements relating to the registration
of transfer of such Senior Note (the form of which is substan tially the same as
ANNEX A to the Offering Memorandum) and, if such transfer is in respect of an
aggregate Accreted Value of Senior Notes less than $250,000, an opinion of
counsel acceptable to the Company that such transfer is in compliance with the
Act, (VI) in accordance with another exemption from the registration
requirements of the Act (and based upon an opinion of counsel acceptable to the
Company) or (VII) pursuant to an effective registration statement and, in each
case, in accordance with the applicable securities laws of any state of the
United States or any other applicable jurisdiction and (y) they will deliver to
each person to whom such Senior Notes or an interest therein is transferred a
notice substantially to the effect of the foregoing.
e. Each Initial Purchaser also understands that the Company and,
for purposes of the opinions to be delivered to you pursuant to Section 7
hereof, counsel to the Company and counsel to the Initial Purchasers will rely
upon the accuracy and truth of the foregoing representations and hereby consents
to such reliance.
6. INDEMNIFICATION AND CONTRIBUTION.
a. The Company agrees to indemnify and hold harmless (i) each
Initial Purchaser, (ii) each person, if any, who controls such Initial Purchaser
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
and (iii) the respective officers, directors, partners, employees,
representatives and agents of each Initial Purchaser or any controlling person
(any person referred to in clause (i), (ii) or (iii) may hereinafter be referred
to as an "Indemnified Person") from and against any and all losses, claims,
damages, liabilities and expenses (including reasonable costs of investigation)
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in the Preliminary Offering Memorandum or the Offering
Memorandum or in any amend ment or supplement thereto, or arising out of or
based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
expenses arise out of or are based upon any untrue statement or omission or
alleged untrue statement or omission which has been made therein or omitted
therefrom in reliance upon and in conformity with information relating to such
Initial Purchasers furnished to the Company in writing by or on behalf of such
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Initial Purchaser expressly for use in connection therewith. The foregoing
indemnity agreement shall be in addition to any liability which the Company may
otherwise have.
b. If any action, suit or proceeding shall be brought against any
Indemnified Person with respect to which indemnity may be sought against the
Company, such Indemnified Person shall promptly notify the Company, and the
Company shall assume the defense thereof, including the employment of counsel
and payment of all fees and expenses. Any Indemnified Person shall have the
right to employ separate counsel in any such action, suit or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Person, unless (i) the Company has
agreed in writing to pay such fees and expenses, (ii) the Company has failed to
assume the defense and employ counsel, or (iii) the named parties to any such
action, suit or proceeding (including any impeded parties) include both such
Indemnified Person and the Company and such Indemnified Person shall have been
advised by its counsel that representation of such Indemnified Person and the
Company by the same counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by the same counsel has
been proposed) due to actual or potential differing interests between them (in
which case the Company shall not have the right to assume the defense of such
action, suit or proceeding on behalf of such Indemni fied Person). It is
understood, however, that the Company shall, in connection with any one such
action, suit or proceeding or separate but substantially similar or related
actions, suits or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of only one separate firm of attorneys (in addition to any local
counsel) at any time for such Indemnified Person not having actual or potential
differing interests with such Indemnified Person or among themselves, which firm
shall be designated in writing by such Indemni fied Person, and that all such
fees and expenses shall be reimbursed as they are incurred. The Company shall
not be liable for any settlement of any such action, suit or proceeding effected
without its written consent, but if settled with such written consent, or if
there be a final judgment for the plaintiff in any such action, suit or
proceeding, the Company agrees to indemnify and hold harmless any Indemnified
Person, to the extent provided in the preceding paragraph, from and against any
loss, claim, damage, liability or expense by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse such indemnified
party for fees and expenses of counsel as incurred, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
business days after receipt by such indemnifying party of the aforesaid request
and (ii) such indemnifying party shall not have reimbursed such indemnified
party in accordance with such request prior to the date of such settlement. The
indemnifying party shall not, without the prior written consent of each
indemnified party, settle or compromise or consent to the entry of judgment in
or otherwise seek to terminate any pending or threatened action, claim,
litigation or proceeding in respect of which indemnification or contribution may
be sought hereunder (whether or not any indemnified party is a party thereto),
unless such settlement, compromise, consent or termination includes an
unconditional release of each indemnified party from all liability arising out
of such action, claim, litigation or proceeding.
c. The Initial Purchasers agree to indemnify and hold harmless the
Company, its directors, its officers and any person who controls the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
to the same extent as the foregoing indemnity from the Company to each
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Indemnified Person, but only with respect to information relating to such
Indemnified Person furnished in writing by or on behalf of such Indemnified
Person through you expressly for use in the Preliminary Offering Memorandum or
Offering Memorandum, or any amendment or supplement thereto. If any action, suit
or proceeding shall be brought against the Company, any of its directors, any
such officer, or any such controlling person based on the Offering Memorandum,
or any amend ment or supplement thereto, and in respect of which indemnity may
be sought against any Initial Purchasers pursuant to this paragraph c. the
Initial Purchasers shall have the rights and duties given to the Company by
paragraph b. above (except that if the Company shall have assumed the defense
thereof such Initial Purchasers shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Initial
Purchasers), and the Company, its directors, any such officer, and any such
controlling person shall have the rights and duties given to such Initial
Purchasers by paragraph b. above. The foregoing indemnity agreement shall be in
addition to any liability which such Initial Purchasers may otherwise have.
d. If the indemnification provided for in this Section 6 is
unavailable to an indemnified party under paragraphs a. or c. hereof in respect
of any losses, claims, damages, liabilities or expenses referred to therein,
then an indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Initial Purchaser on the other hand from the
offering of the Senior Notes, or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and the Initial Purchaser
on the other hand in connection with the statements or omissions that resulted
in such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and any Initial Purchaser on the other hand shall be deemed to
be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by such Initial Purchaser. The relative fault
of the Company on the one hand and any Initial Purchaser on the other hand shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or by the Initial Purchaser on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
e. The Company and the Initial Purchasers agree that it would
not be just and equitable if contribution pursuant to this Section 6 were
determined by a pro rata allocation or by any other method of allocation that
does not take account of the equitable considerations referred to in paragraph
d. above. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities and expenses referred to in paragraph d.
above shall be deemed to include, subject to the limitations set forth above,
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 6, no Initial
Purchaser shall be required to contribute any amount in excess of the amount by
which the total discounts and commissions received by such Initial Purchaser
pursuant to this Agreement exceeds the amount of any damages which the Initial
Purchaser has otherwise been required to pay by reason of such untrue or alleged
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untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
f. Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under this
Section 6 shall be paid by the indemnify ing party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 6 and the
representations and warranties of the Company and of the Initial Purchasers set
forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of the Initial
Purchasers or any person controlling such Initial Purchasers, the Company, its
directors or officers, or any person controlling the Company, (ii) acceptance of
any Senior Notes and payment therefor hereunder, and (iii) any termination of
this Agreement. A successor to an Initial Purchaser or any person controlling
such Initial Purchaser, or to the Company, its directors or officers, or any
person controlling the Company, shall be entitled to benefits of the indemnity,
contribution, and reimbursement agreements contained in this Section 6.
g. INFORMATION FURNISHED BY THE INITIAL PURCHASERS. The statements
set forth in the paragraph on the cover page, the stabilization legend appearing
as the bold paragraph on page 2 and in the third full paragraph and the fourth
sentence of the seventh paragraph, the tenth paragraph and the eleventh
paragraph appearing under the caption "Plan of Distribution" in the Preliminary
Offering Memorandum and Offering Memorandum constitute the only information
relating to the Initial Purchasers furnished to the Company in writing by or on
behalf of the Initial Purchasers as such information is referred to in Sections
5(b) and 6 hereof.
7. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The obligation of
the Initial Purchaser to purchase Senior Notes hereunder is subject to the
following conditions:
a. All of the representations and warranties of the Company
contained in this Agreement shall be true and correct on the date hereof and on
the Closing Date with the same force and effect as if made on and as of the date
hereof and the Closing Date, respectively. The Company shall have performed or
complied with all of the agreements herein contained and required to be
performed or complied with by it at or prior to the Closing Date.
b. The Offering Memorandum shall have been printed and copies
distributed to the Initial Purchasers not later than 10:00 a.m. New York City
time on the first business day after the date of this Agreement or at such later
date and time as to which you may agree, and no stop order suspending the
qualification or exemption from qualification of any of the Senior Notes in any
jurisdiction shall have been issued and no proceeding for that purpose shall
have been commenced or shall be pending or threatened.
c. No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency which would, as of the Closing Date, prevent the issuance or
sale of any of the Senior Notes; no action, suit or proceeding shall be pending
against or affecting or, to the knowledge of the Company, threatened against,
the Company or any of the Subsidiaries before any court or arbitrator or any
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governmental body, agency or official that, if adversely determined, would
prohibit, interfere with or adversely affect the issuance or sale of the Senior
Notes or would have a Material Adverse Effect or in any manner draw into
question the validity of any of the Transaction Documents; and no stop order,
injunction, restraining order, or order of any nature preventing the use of the
Offering Memorandum, or any amendment or supplement thereto, or any order
asserting that any of the transactions contemplated by this Agreement are
subject to the registration requirements of the Act shall have been issued.
d. Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change, or any development involving a prospective
change, in or affecting the condition (financial or other), business,
properties, net worth, or results of operations of the Company or the
Subsidiaries not contemplated by the Offering Memorandum, which, would
materially adversely affect the market for the Senior Notes or (ii) any event or
development relating to or involving the Company or any officer or director of
the Company which makes any statement made in the Offering Memorandum untrue in
any material respect which, in the opinion of the Company and its counsel or the
Initial Purchaser and their counsel, requires the making of any addition to or
change in the Offering Memorandum in order to make the statements therein not
misleading, if amending or supplementing the Offering Memorandum to reflect such
event or development would in the opinion of the Initial Purchasers, materially
adversely affect the market for the Senior Notes.
e. The Initial Purchasers shall have received on the Closing Date,
an opinion of Holme Roberts & Owen LLP, counsel for the Company, dated the
Closing Date and addressed to you, to the effect that:
i. The Company is a corporation duly incorporated and validly
existing in good standing under the laws of the State of Delaware with full
corporate power and authority to own lease and operate its properties and to
conduct its business as described in the Offering Memorandum, (and any amendment
or supplement thereto) and, based solely on certificates from and correspondence
with public officials, is qualified to do business and is in good standing in
the states Colorado and Delaware;
ii. Each of UIPI and JVI (collectively, the "Designate
Subsidiaries") and each of the corporate Subsidiaries incorporated in the United
States (the "U.S. Subsidiaries") is a corporation duly organized and validly
existing in good standing under the laws of the jurisdiction of its
incorporation, with full power and authority to own, lease, and operate its
properties and to conduct its business as described in the Offering Memorandum
(and any amendment or supplement thereto); and all the outstanding shares of
capital stock of each of the Designated Subsidiaries have been duly authorized
and validly issued, are fully paid and nonassessable and, except as set forth in
the Offering Memorandum, are owned by the Company directly free and clear, to
the best knowledge of such counsel after reasonable inquiry, of any security
interest, lien, adverse claim, equity or other encum brance;
iii. All the outstanding shares of capital stock or other
equity interest of each of the U.S. Subsidiaries have been duly authorized and
validly issued, are fully paid and nonassessable and were not issued in
violation of any preemptive or similar rights (whether provided pursuant to
Transaction Documents or, to the best knowledge of such counsel, after due
inquiry, contractually), and, except as set forth in the Offering Memorandum,
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are owned by the Company directly, or indirectly through one of the U.S.
Subsidiaries, free and clear, to the best knowledge of such counsel after due
inquiry, of any security interest, lien, adverse claim, equity or other
encumbrance.
iv. The authorized and outstanding capital stock of the Company
is as set forth under the caption "Capitalization" in the Offering Memorandum;
and the Company's ownership interest with respect to each of the Designated
Subsidiaries is as described in the Offering Memoran dum.
v. All of the outstanding shares of capital stock of the
Company have been duly authorized and validly issued, and are fully paid and
nonassessable;
vi. The Company has all requisite corporate power and authority
to execute, deliver and perform its obligations under each of the Transaction
Documents and to consummate the transactions contemplated thereby, including,
without limitation, with the corporate power and authority to issue, sell and
deliver the Senior Notes as contemplated by this Agreement and to perform its
obligations hereunder and thereunder.
vii. The Company has the corporate power and authority to enter
into this Agreement and to issue, sell and deliver the Senior Notes to the
Initial Purchasers as provided herein, and this Agreement has been duly
authorized, executed and delivered by the Company and is a valid, legal and
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except as enforcement of rights to indemnity and contribution
hereunder and thereunder may be limited by federal or state securities laws or
principles of public policy and subject to the qualification that the
enforceability of the Company's obligations hereunder and thereunder may be
limited by bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium, and other laws relating to or affecting creditors' rights generally
and by general principles of equity, regardless of whether enforcement is sought
in a proceeding at law or in equity;
viii. The Company has the corporate power and authority to
execute, deliver and perform its respective obligations under the Senior Notes;
ix. The Senior Notes and the Indenture have been duly
authorized, executed and delivered by the Company;
x. The Company has duly and validly authorized, executed and
delivered the Indenture and the Supplemental Indentures and (assuming the due
authorization, execution and delivery thereof by the Trustee) the Indenture and
the Supplemental Indentures are valid and legally binding obligations of the
Company, enforceable against the Company in accordance with their terms, except
(A) as such enforcement may be limited by (y) bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights and remedies generally, or (z) general principles of equity, regardless
of whether enforcement is sought in a proceeding at law or in equity, and (B) to
the extent that a waiver of rights under any usury laws may be unenforceable.
The Indenture and the Supplemental Indentures conform as to legal matters in all
material respects to the summary description thereof in the Offering Memorandum.
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xi. The Senior Notes have been duly and validly authorized for
issuance and sale to the Initial Purchasers by the Company pursuant to this
Agreement and, when issued and authenti cated in accordance with the terms of
the Indenture and delivered against payment therefor in accordance with the
terms hereof, will be the valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms and entitled to
the benefits of the Indenture, except (A) as such enforcement may be limited by
(y) bankruptcy, fraudulent conveyance, insolvency, reorganiza tion, moratorium
or similar laws affecting creditors' rights and remedies generally, or (z)
general principles of equity, regardless of whether enforcement is sought in a
proceeding at law or in equity, and (B) to the extent that a waiver of rights
under any usury laws may be unenforceable. The Senior Notes, when issued,
authenticated and delivered, will conform as to legal matters in all material
respects to the summary description thereof in the Offering Memorandum.
xii. The Exchange Notes have been duly and validly authorized
for issuance by the Company and, when issued and authenticated in accordance
with the terms of the Indenture and the Registration Rights Agreement, will be
valid and legally binding obligations of the Company, enforceable against the
Company in accordance with their terms and entitled to the benefits of the
Indenture, except (A) as such enforcement may be limited by (y) bankruptcy,
fraudulent conveyance, insolvency, reorganiza tion, moratorium or similar laws
affecting creditors' rights and remedies generally, or (z) general principles of
equity, regardless of whether enforcement is sought in a proceeding at law or in
equity, and (B) to the extent that a waiver of rights under any usury laws may
be unenforceable.
xiii. The Registration Rights Agreement has been duly and
validly authorized, executed and delivered by the Company, and is a valid and
legally binding obligation of the Company, enforceable against the Company in
accordance with its terms, except (A) as such enforcement may be limited by (y)
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights and remedies generally and (z) general
principles of equity, regardless of whether enforcement is sought in a
proceeding at law or in equity and (B) such counsel need express no opinion as
to the enforceability of the indemnification or contribution provisions
contained in Section 7 of the Registration Rights Agreement. The Registration
Rights Agreement conforms, as to legal matters, in all material respects to the
summary description thereof in the Offering Memorandum.
xiv. When the Senior Notes are issued and delivered pursuant to
this Agreement, none of the Senior Notes will be of the same class (within the
meaning of Rule 144A under the Act) as securities of the Company that are listed
on a national securities exchange registered under Section 6 of the Exchange Act
or that are quoted in a United States automated inter-dealer quotation system.
xv. Neither the Company nor any of the Designated Subsidiaries
nor any U.S. Subsidiary is in violation of its respective certificate or
articles of incorporation or bylaws, or other organization documents, or to the
best knowledge of such counsel after reasonable inquiry, is in material default
ir the performance of any obligation, agreement or condition contained in any
permit or any bond, debenture, note or other evidence of indebtedness, except as
may be disclosed in the Offering Memorandum;
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xvi. Registration of the Senior Notes under the Act or
qualification of the Indenture under the Trust Indenture Act of 1939, as
amended, is not required in connection with the offer, sale and delivery of the
Senior Notes to the Initial Purchasers or the initial placement of the Senior
Notes by the Purchaser pursuant to the terms of this Agreement, it being
understood that in rendering this opinion such counsel may assume the accuracy
of the representations of the Purchaser and the Company contained herein and
that the offer, sale and delivery of the Senior Notes have been made as
contemplated by this Agreement and the Offering Memorandum.
xvii. The execution, delivery and performance by the Company of
each of the Transaction Documents, the issuance and sale of the Senior Notes,
and the consummation of the transac tions contemplated hereby and thereby, will
not violate, conflict with or constitute a breach of any of the terms or
provisions of, or a default (or an event that with notice or the lapse of time,
or both, would constitute a default) under, or require consent under, or result
in the imposition of a lien or encumbrance on any assets or properties of the
Company or any of its subsidiaries, or an acceleration of indebtedness pursuant
to, (A) the organizational documents of the Company or any of its subsidiaries,
(B) any bond, debenture, note, indenture, mortgage, deed of trust, license or
other agreement or instrument, known to such counsel after reasonable inquiry,
to which the Company or any of its subsidiaries is a party or by which any of
them or their property is or may be bound, (C) any U.S. law, statute, rule or
regulation applicable to the Company, any of the U.S. Subsidiaries or any of
their assets or properties, or (D) any judgment, order or decree of any U.S.
court or governmental agency or U.S. authority, known to such counsel after
reasonable inquiry, having jurisdiction over the Company, any of the U.S.
Subsidiaries or their assets or properties, except such conflicts or violations
as would not individually or in the aggregate be reasonably expected to have a
Material Adverse Effect. No consent, approval, authorization or order of, or
filing, registration, qualification, license or permit of or with, any court or
governmental agency, body or administrative agency in the United States is
required for the execution, delivery and performance of this Agreement or the
other Transaction Documents, except (subject to clause (xvi) above) such as have
been obtained prior to the date hereof (or, in the case of the Registration
Rights Agreement, are planned to be obtained or made under the Act, the Trust
Indenture Act and state securities or Blue Sky laws and regulations or such as
may be required by the NASD). In rendering the opinions required in this clause
(xvii), such counsel may rely on the accuracy of the representations of the
Initial Purchasers and the Company contained in this Agreement. No consents or
waivers from any other person are required for the execution, delivery and
performance of this Agreement and the other Transaction Documents and the
consummation of the transactions contemplated hereby and thereby, other than
such consents and waivers as have been obtained, or except where the failure to
obtain such consents or waivers would not individu ally or in the aggregate be
reasonably expected to have a Material Adverse Effect.
xviii. To the best knowledge of such counsel, after reasonable
inquiry, no action has been taken and no statute, rule or regulation or order
has been enacted, adopted or issued by any U.S. governmental agency that
prevents the issuance of the Senior Notes, no injunction, restraining order or
order of any nature by a United States federal or state court of competent
jurisdiction has been issued that prevents the issuance of the Senior Notes and
no action, suit or proceeding is pending against or affecting or threatened
against the Company or any of the U.S. Subsidiaries before any court or
arbitrator or any governmental body, agency or official which, if adversely
determined, would prohibit, interfere with or adversely affect the issuance or
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marketability of the Senior Notes or in any manner draw into question the
validity of any Transaction Document.
xix. To the best knowledge of such counsel after reasonable
inquiry, neither the Company nor any of the U.S. Subsidiaries is in violation of
any law, ordinance, administrative or other governmental rule or regulation
applicable to the Company or any of the U.S. Subsidiaries or any of the U.S.
Subsidiaries or of any decree of any court or governmental agency or body having
jurisdiction over the Company or any of the U.S. Subsidiaries or any of the U.S.
Subsidiaries, except for such violations as would not individually or in the
aggregate be reasonably likely to have a Material Adverse Effect.
xx. The statements in the Offering Memorandum, insofar as they
are descriptions of contracts, agreements or other legal documents, or refer to
statements of law or legal conclusions, are accurate and complete in all
material respects and present fairly the information required to be shown, to
the extent governed by the laws of jurisdictions on which such counsel expresses
an opinion;
xxi. Each of the Company and each Designated Subsidiary and
each U.S. Subsidiary has all necessary governmental authorizations, approvals,
orders, licenses, certificates, franchises and permits of and from all
governmental regulatory officials and bodies (except where the failure so to
have any such authorizations, approvals, orders, licenses, certificates,
franchises or permits, individually or in the aggregate, would not have a
Material Adverse Effect), to own its properties and to conduct its businesses as
now being conducted, as described in the Offering Memorandum;
xxii. Neither the Company nor any of its subsidiaries is now,
nor, after the sale of Senior Notes to be sold by it hereunder and the
application of the proceeds from such sales as described in the Offering
Memorandum under the caption "Use of Proceeds," will they be (i) an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act, or (ii) a "holding company" or a "subsidiary
company" or an "affiliate" of a holding company within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
xxiii. There is (A) to the knowledge of such counsel, after
reasonable inquiry, no legal, regulatory or governmental action, suit or
proceeding before or by any court, arbitrator or governmental agency, body or
official, domestic or foreign, now pending or, to the knowledge of such counsel,
threatened or contemplated to which the Company or any of the U.S. Subsidiaries
is a party or to which the business or property of the Company or any of the
U.S. Subsidiaries is subject, (B) no law, statute, rule, regulation or order
that has been enacted, adopted or issued by any governmental agency or that has
been proposed by any governmental body, to the extent governed by the laws of
jurisdictions on which such counsel expresses an opinion, (C) to the knowledge
of such counsel, after reasonable inquiry, no injunction, restraining order or
order of any nature by a federal or state court of competent jurisdiction to
which the Company or any of the U.S. Subsidiaries is subject issued that, in the
case of clauses (A), (B) and (C) above, (x) might, singly or in the aggregate,
result in a Material Adverse Effect, (y) would interfere with or adversely
affect the issuance of the Senior Notes or (z) in any manner draw into question
the validity of this Agreement or the other Transaction Documents.
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xxiv. To the best knowledge of such counsel, there are no
holders of debt securities of the Company who, by reason of the execution by the
Company of this Agreement or any other Transaction Document or the consummation
of the transactions contemplated hereby or thereby, have the right to request or
demand that the Company register debt securities of the Company under the Act or
analogous foreign laws and regulations securities held by them.
xxv. The Offering Memorandum, as of its date, and each
amendment or supplement thereto, if any, as of its date (except for the
financial statements, including the notes thereto, and supporting schedules and
other financial, statistical, and accounting data included therein or omitted
therefrom, as to which no opinion need be expressed), contains all the
information specified in, and meeting all the requirements of, Rule l44A(d)(4)
under the Act.
xxvi. To the best knowledge of such counsel after reasonable
inquiry, except as described in the Offering Memorandum, there are no
outstanding options, warrants or other rights calling for the issuance of, and
such counsel does not know of any commitment, plan or arrangements to issue, any
shares of capital stock of the Company or any security convertible into or
exchangeable or exercisable for capital stock of the Company;
xxvii. Neither the Company nor any of its subsidiaries is now,
nor, after the sale of Senior Notes to be sold by it hereunder and the
application of the proceeds from such sales as described in the Offering
Memorandum under the caption "Use of Proceeds," will they be (i) an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act, or (ii) a "holding company" or a "subsidiary
company" or an "affiliate" of a holding company within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
xxviii. To the best knowledge of such counsel after reasonable
inquiry, except as described in, or incorporated by reference into, the Offering
Memorandum there are no outstanding options, warrants or other rights calling
for the issuance of, and such counsel does not know of any commitment, plan or
arrangement to issue, any shares of capital stock of the Company or any security
convertible into or exchangeable or exercisable for capital stock of the
Company;
xxix. To the best knowledge of such counsel after reasonable
inquiry, except as described in, or incorporated by reference into, the Offering
Memorandum, there is no holder of any security of the Company or any other
person (other than the Initial Purchasers) who has the right, contractual or
otherwise, to cause the Company to sell or otherwise issue to them, or to permit
them to underwrite the sale of, the Notes or the right to have any other
securities of the Company included in the Offering Memorandum or the right, to
require registration under the Act of any securities of the Company;
xxx. The issuance and sale of the Notes pursuant to the terms
of this Agreement will not violate Regulation G (12 C.F.R. Part 207), Regulation
T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221) or Regulation X (12
C.F.R. Part 224) of the Board of Governors of the Federal Reserve System;
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xxxi. The statements in the Offering Memorandum under "Risk
Factors -International Tax Risks," and "-Original Issue Discount Consequences"
insofar as they constitute statements of law or legal conclusions are accurate
in all material respects;
xxxii. (A) The Company has the requisite corporate power and
authority to create, deliver and perfect the security interests created under
the Pledge Agreements; (B) the Pledge Agreements have been duly authorized,
executed and delivered by the Company and constitute valid and legally binding
obligations of the Company, enforceable against it in accordance with their
terms, subject to the qualification that the enforceability of the Company's
obligations hereunder and thereunder may be limited by (I) bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium, and other laws
relating to or affecting creditors' rights generally and by general equitable
principles, (2) public policy concerns that may render unenforceable the
effectiveness of waivers of trial by jury in the Pledge Agreements or any choice
of jurisdiction or venue provision and (3) other remedial provisions of law that
do not materially interfere with the practical realization of the benefits or
remedies reasonably contemplated by the Pledge Agreements and (C) after giving
effect to, and as a result of, the execution and delivery of the Pledge
Agreements and assuming the Collateral Agent is holding the Collateral including
certificates representing the Collateral in the State of New York, the Pledge
Agreements create a valid and perfected security interest in the Collateral in
favor of the Collateral Agent, on behalf and for the benefit of the holders of
the Notes, subject to no other consensual security interest in favor of any
other person (other than as contemplated by the Offering Memorandum), and no
filings or recordings will be required in order to perfect or maintain the
security interests created under the Pledge Agreement in such Collateral; and
xxxiii. The Company is the owner of record of all of the
outstanding Capital Stock or other securities evidencing equity ownership of
UIPI and JVI, free and clear, to the best knowledge of such counsel after
reasonable inquiry, of any security interest, claim, lien or encum brance
(except for the pledge pursuant to the Pledge Agreement securing obligations
under the Existing Indentures and the Indenture); and all of such securities
have been duly authorized, validly issued and are fully paid and nonassessable.
To the best knowledge of such counsel, there are no outstanding rights, warrants
or options to acquire, or instruments convertible into or exchangeable for, any
such shares of capital stock or other equity interest of UIPI or JVI.
In addition, such counsel shall state that it has generally
reviewed and discussed with certain officers and other representatives of the
Company, representatives of the independent public accountants for the Company,
your representatives and your counsel the preparation of the Offering Memorandum
and the statements contained therein and, although such counsel has not
independently verified the accuracy, completeness or fairness of such statements
(except as indicated above), such counsel advises you that, on the basis of the
foregoing, no facts came to its attention that caused it to believe that the
Offering Memorandum (as amended or supplemented, if applicable) as of the date
of the Offering Memorandum or at the Closing Date, contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Without limiting the
foregoing, such counsel may further state that they assume no responsibility
for, and have not independently verified, the accuracy, completeness or fairness
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of, and express no view as to, the financial statements, notes and schedules and
other financial or statistical data included in the Offering Memorandum.
Such opinion may be limited to the federal laws of the United
States and the internal laws of the State of Colorado and the General
Corporation Law of the State of Delaware. In rendering their opinion as
aforesaid, counsel may rely upon an opinion or opinions, each dated the Closing
Date, of other counsel retained by them or the Company as to laws of any
jurisdiction other than the United States or the State of Colorado, provided
that (1) each-such local counsel is acceptable to the Initial Purchasers, (2)
such reliance is expressly authorized by each opinion so relied upon and a copy
of each such opinion is delivered to the Initial Purchasers and is in form and
substance satisfactory to it and its counsel, and (3) counsel shall state in
their opinion that they believe that they and the Initial Purchasers are
justified in relying thereon.
f. The Initial Purchasers shall have received on the Closing Date
the opinions of Stibbe Simont Monahan Duhot (with respect to UPC,A2000, KTA,
KTH, KTE and the laws of The Netherlands), Heller, Lober, Bahn & Partners (with
regard to the Telekabel Group and the laws of Austria), Stibbe Simont Monahan
Dahot (with regard to Radio Public and the laws of Belgium, Advokatfirmaet
Steestup (with regard to Norkabel and Janco and the laws of Norway), Freehill
Hollingdale & Page (with regard to Austar and the laws of Australia), Carey y
Cia Ltda. (with regard to VTR Hipercable and the laws of Chile), each dated the
Closing Date and addressed to the Initial Purchasers, substantially to the
effect that:
i. The statements in the Offering Memorandum, insofar as they
are descriptions of contracts, agreements or other legal documents, or refer to
statements of law or legal conclusions, are accurate and complete in all
material respects and present fairly the information purported to be shown, and
the descriptions of the applicable government regulations in each of such
countries are accurate and complete in all material respects;
ii. Each of UPC, the Telekabel Group companies, Radio Public,
Norkabel, Janco, KTA, KTH, KTE, A2000, CTV Pty. Ltd. and STV Pty. Ltd
("CTV/STV"), Cablevision, STX and VTR Hipercable (collectively, the "Foreign
Subsidiaries") is a corporation or other legal entity duly organized and validly
existing in good standing under the laws of the jurisdiction of its formation,
with full power and authority to own, lease, and operate its properties and to
conduct its business as described in the Offering Memorandum, (and any amendment
or supplement thereto); and all the outstanding shares of capital stock or other
equity interest of each of the Foreign Subsidiar ies have been duly authorized
and validly issued, are fully paid and nonassessable and, except as set forth in
the Offering Memorandum, are owned by the Company directly, or indirectly
through one of the Subsidiaries, free and clear, to the best knowledge of such
counsel after reasonable inquiry, of any security interest, lien, adverse claim,
equity or other encumbrance;
iii. The Company's ownership interest with respect to each of
the Foreign Subsidiaries is as described in the Offering Memorandum;
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iv. None of the Foreign Subsidiaries is in violation of its
respective certificate or articles of incorporation or bylaws, or other
organizational documents; to the best knowledge of such counsel after reasonable
inquiry, neither the Company nor any of the Foreign Subsidiaries is in material
default in the performance of any obligation, agreement or condition contained
in any permit or any bond, debenture, note or other evidence of indebtedness,
except as may be disclosed in the Offering Memorandum;
v. Neither the offer, sale or delivery of the Notes, the
execution, delivery or performance of this Agreement, compliance by the Company
with the provisions hereof and consummation by the Company of the transactions
contemplated hereby conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the certificate or articles of
incorpora tion or bylaws, or other organizational documents, of any of the
Foreign Subsidiaries or any agreement indenture, lease or other instrument to
which the Company or any of the Foreign Subsidiaries is a party or by which any
of them or any of their respective properties is bound that is known to such
counsel after reasonable inquiry, or, to the best knowledge of such counsel
after reasonable inquiry, will result in the creation or imposition of any
material lien charge or encumbrance upon any property or assets of the Company
or any of the Foreign Subsidiaries nor will any such action result in any
violation of any existing law, regulation, ruling (assuming compliance with all
applicable state securities and Blue Sky laws), judgment, injunction, order or
decree known to such counsel after reasonable inquiry, applicable to the Company
or the Foreign Subsidiaries or any of their respective properties, except where
such violation would not have a Material Adverse Effect;
vi. No consent, approval, authorization or other order of, or
registration or filing with, any court, regulatory body, administrative agency
or other governmental body, agency, or official is required on the part of the
Company or any Foreign Subsidiary (except as may be required under state
securities or Blue Sky law governing the purchase and distribution of the Notes)
for the valid issuance and sale of the Notes to the Initial Purchasers as
contemplated by this Agreement;
vii. To the best knowledge of such counsel after reasonable
inquiry, neither the Company nor any of the Foreign Subsidiaries is in violation
of any law, ordinance administrative or governmental rule or regulation
applicable to the Company or any of the Foreign Subsidiaries of any decree of
any court or governmental agency or body having jurisdiction over the Company or
any of the Foreign Subsidiaries, except where such violation would no have a
Material Adverse Effect;
viii. Each of the Company and each Foreign Subsidiary has all
necessary governmental authorizations, approvals, orders, licenses,
certificates, franchises and permits of and from all governmental regulatory
officials and bodies (except where the failure so to have any such
authorizations, approvals, orders, licenses, certificates, franchises or
permits, individually or in the aggregate, would not have a Material Adverse
Effect) to own its properties and to conduct its businesses as now being
conducted, as described in the Offering Memorandum; and
ix. Each of the Company and each Foreign Subsidiary owns all
licenses and rights described in the Offering Memorandum as being owned by the
Company or the Foreign Subsidiaries and necessary for the conduct of its
businesses, and such counsel is not aware of any claim to the contrary or any
27
<PAGE>
challenge by any other person to the rights of the Company or any Foreign
Subsidiary with respect to the foregoing.
g. The Initial Purchasers shall have received on the Closing Date
an opinion of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Initial
Purchasers, dated the Closing Date and addressed to you, in form and substance
reasonably satisfactory to the Initial Purchasers.
h. The Initial Purchasers shall have received letters
addressed to the Initial Purchasers and dated the date hereof and the Closing
Date from Arthur Andersen LLP, and KPMG Accountants N.V., and others all of
which are independent public accountants, substantially in the forms heretofore
approved by the Initial Purchasers.
i. (i) There shall not have been any change in the capital stock
of the Company (other than as a result of the issuance of shares of Class A
Common Stock of the Company upon the exercise of outstanding warrants or stock
options or upon conversion of shares of Class B Common Stock of the Company) nor
any material increase in the short-term or long-term debt of the Company (other
than in the ordinary course of business) from that set forth or contemplated in
the Offering Memorandum (or any amendment or supplement thereto); (ii) there
shall not have been, since the respective dates as of which information is given
in the Offering Memorandum, (or any amendment or supplement thereto), except as
may otherwise be stated in the Offering Memorandum (or any amendment or
supplement thereto), any material adverse change in the condition (financial or
other), business, prospects, properties, net worth or results of operations of
the Company and the Subsidiaries taken as a whole; (iii) the Company, the
Subsidiaries shall not have any liabilities or obligations, direct or contingent
(whether or not in the ordinary course of business), that are material to the
Company and the Subsidiaries taken as a whole, other than those reflected in the
Offering Memorandum (or any amendment or supplement thereto); and (iv) all the
representations and warranties of the Company contained in this Agreement shall
be true and correct on and as of the date hereof and on and as of the Closing
Date as if made on and as of the Closing Date, and you shall have received a
certificate, dated the Closing Date and signed by the chief executive officer
and the chief financial officer of the Company (or such other officers as are
acceptable to you), to the effect set forth in this Section 7(i).
j. The Company shall not have failed at or prior to the Closing
Date to have performed or complied with any of its agreements herein contained
and required to be performed or complied with by it hereunder at or prior to the
Closing Date.
k. The Company shall have furnished or caused to be furnished to
you such further certificates and documents as you shall have requested.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to the Initial Purchasers and your counsel.
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Any certificate or document signed by any officer of the Company and
delivered to the Initial Purchasers, or counsel for the Initial Purchasers,
shall be deemed a representation and warranty by the Company to the Initial
Purchasers as to the statements made therein.
8. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become effective
upon the execution hereof.
9. TERMINATION OF AGREEMENT. This Agreement shall be subject to
termination in the absolute discretion of the Initial Purchasers, without
liability on the part of the Initial Purchaser to the Company, by notice to the
Company, if prior the Closing Date, (i) trading in securities generally on the
New York Stock Exchange, American Stock Exchange or Nasdaq National Market shall
have been suspended or materially limited, (ii) general moratorium on commercial
banking activities in New York or Colorado shall have been declared by either
federal or state authorities, or (iii) there shall have occurred any outbreak or
escalation of hostile or other international or domestic calamity, crisis or
change in political, financial or economic condition the effect of which on the
financial markets of the United States is such as to make it, in the judgement
of the Initial Purchasers impracticable or inadvisable to commence or continue
the offering of the Senior Notes at the offering price set forth on the cover
page of the Offering Memorandum, or to enforce contracts for the resale of the
Notes by the Initial Purchasers. Notice of such termination may be given to the
Company by telegram, telecopy telephone and shall be subsequently confirmed by
letter.
If on the Closing Date any one or more of the Initial Purchasers shall
fail or refuse to purchase the Senior Notes which it or they have agreed to
purchase hereunder on such date and the aggregate number of Senior Notes which
such defaulting Initial Purchaser or Initial Purchasers, as the case may be,
agreed but failed or refused to purchase is not more than one-tenth of the total
number of Senior Notes to be purchased on such date by all Initial Purchasers,
each non-defaulting Initial Purchaser shall be obligated severally, in the
proportion which the number of Senior Notes set forth opposite its name in
Exhibit B bears to the total number of Senior Notes which all the non-defaulting
Initial Purchasers, as the case may be, have agreed to purchase, or in such
other proportion as the Initial Purchasers may specify, to purchase the Senior
Notes which such defaulting Initial Purchaser or Initial Purchasers, as the case
may be, agreed but failed or refused to purchase on such date; PROVIDED that in
no event shall the number of Senior Notes which any Initial Purchaser has agreed
to purchase pursuant to Section 2 hereof be increased pursuant to this Section 9
by an amount in excess of one-ninth of such number of Senior Notes without the
written consent of such Initial Purchaser. If on the Closing Date any Initial
Purchaser or Initial Purchasers shall fail or refuse to purchase Senior Notes
and the aggregate number of Senior Notes with respect to which such default
occurs is more than one-tenth of the aggregate number of Senior Notes to be
purchased on such date by all Initial Purchasers, and arrangements satisfactory
to the Initial Purchasers and the Company for purchase of such Senior Notes are
not made within 48 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Initial Purchasers and the
Company. In any such case which does not result in termination of this
Agreement, either the Initial Purchasers or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Offering Memorandum or any other
documents or arrangements may be effected. Any action taken under this paragraph
shall not relieve any defaulting Initial Purchaser from liability in respect of
any such Initial Purchaser under this Agreement.
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10. MISCELLANEOUS. Except as otherwise provided in Sections 4 and 9
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to Company, at the office of the Company
at 4643 South Ulster Street, Denver, Colorado 80237, Attention: Chief Financial
Officer; or (ii) if to the Initial Purchasers, care of Donaldson, Lufkin &
Jenrette Securities Corporation, 277 Park Avenue, New York, New York 10172.
This Agreement has been and is made solely for the benefit of the
Initial Purchasers, the Company, its directors and officers, and the other
controlling persons referred to in Section 6 hereof and the respective
successors and assigns, to the extent provided herein, and no other person shall
acquire or have any right under or by virtue of this Agreement. Neither the term
"successor" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from the Initial Purchasers of any of the Senior Notes
in his status as such purchaser.
11. APPLICABLE LAW: COUNTERPARTS. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO
CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK, EXCLUDING
(TO THE GREATEST EXTENT PERMISSIBLE BY LAW) ANY RULE OF LAW THAT WOULD CAUSE THE
APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY NEW
YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR
ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN
RESPECT OF ANY SUIT, ACTION OR PROCEEDING RELATED TO THIS AGREEMENT OR ANY OF
THE MATTERS CONTEMPLATED HEREBY, IRREVOCABLY WAIVES ANY DEFENSE OF LACK OF
PERSONAL JURISDICTION AND IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY
SUIT, ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. THE
COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF
VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY
CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
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Please confirm that the foregoing correctly sets forth the agreement
between the Company the Initial Purchasers.
Very truly yours,
UNITED INTERNATIONAL HOLDINGS, INC.
By: /s/ J. Timothy Bryan
-------------------------------------
Name: J. Timothy Bryan
Title: Chief Financial Officer
The foregoing Note Purchase Agreement is hereby
confirmed and accepted as of the date first
above mentioned.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
MORGAN STANLEY DEAN WITTER
TD SECURITIES (USA) INC.
By: DONALDSON,LUFKIN & JENRETTE
SECURITIES CORPORATION
BY: /s/ David F. Posnick
--------------------------------------
Name: David F. Posnick
Title: Sr Vice President
31
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EXHIBIT A
Registration Rights Agreement
32
<PAGE>
EXHIBIT B
INITIAL PURCHASER PRINCIPAL AMOUNT AT MATURITY
- ----------------- ----------------------------
Donaldson Lufkin & Jenrette
Securities Corporation $ 756,250,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated $ 206,250,000
Morgan Stanley Dean Witter $ 206,250,000
TD Securities (USA) Inc. $ 206,250,000
TOTAL $1,375,000,000
33
- --------------------------------------------------------------------------------
10 3/4% SENIOR SECURED DISCOUNT NOTES DUE 2008
REGISTRATION RIGHTS AGREEMENT
DATED FEBRUARY 5, 1998
BY AND AMONG
UNITED INTERNATIONAL HOLDINGS, INC.
AND
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
MORGAN STANLEY DEAN WITTER
TD SECURITIES (USA) INC.
- --------------------------------------------------------------------------------
<PAGE>
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is made and entered into this fifth day
of February, 1998, United among International Holdings, Inc., a Delaware
corporation (the "Company"), and Donaldson, Lufkin & Jenrette Securities
Corporation ("DLJ"), Merrill Lynch, Pierce, Fenner & Smith, Morgan Stanley Dean
Witter and TD Securities (USA) Inc. (each an "Initial Purchaser" and,
collectively, the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement, dated January
30, 1998, among the Company and the Initial Purchasers (the "Purchase
Agreement"). In connection with the transactions contemplated by the Purchase
Agreement, the Company has agreed to provide the registration rights provided
for in this Agreement to the Initial Purchasers and their direct and indirect
transferees. The execution of this Agreement is a condition to the closing of
the transactions contemplated by the Purchase Agreement.
The parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
ADVICE: As defined in the last paragraph of Section 5 hereof.
AFFILIATE: With respect to any specified person, "Affiliate" shall
mean any other person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified person. For the
purposes of this definition, "control," when used with respect to any person,
means the power to direct the management and policies of such person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise and the terms "affiliated," "controlling" and "controlled" have
meanings correlative to the foregoing.
AGREEMENT: This Registration Rights Agreement, as the same may be
amended, supplemented or modified from time to time in accordance with the terms
hereof.
BUSINESS DAY: Any day except a Saturday, a Sunday or a day on
which banking institutions in the State of New York generally are authorized or
required by law or other government action to be closed.
COMPANY: As defined in the preamble hereof.
CONSUMMATE OR CONSUMMATE: When used to qualify the term "Exchange
Offer" shall mean validly and lawfully to issue and deliver the Exchange Notes
pursuant to the Exchange Offer for all Transfer Restricted Notes validly
tendered and not validly withdrawn pursuant thereto in accordance with the terms
of this Agreement.
CONSUMMATION DATE: The date that is 40 days immediately following the
date that a Registration Statement relative to an Exchange Offer, commenced
pursuant to this Agreement, shall have been declared effective by the SEC.
EFFECTIVENESS PERIOD: As defined in Section 3 hereof.
EVENT DATE: As defined in Section 4(a) hereof.
<PAGE>
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated by the SEC pursuant thereto.
EXCHANGE DATE: As defined in Section 2(d) hereof.
EXCHANGE OFFER: An offer to issue, in exchange for any and all of the
Transfer Restricted Notes, a like aggregate principal amount at maturity of
Exchange Notes, which offer shall be made by the Company pursuant to Section 2
hereof.
EXCHANGE NOTES: The 10 3/4% Senior Secured Discount Notes due 2008 of
the Company that are identical to the Notes in all material respects, except
that the provisions regarding restrictions on transfer shall be modified, as
appropriate, and the issuance thereof pursuant to the Exchange Offer shall have
been registered pursuant to an effective Registration Statement in compliance
with the Securities Act.
EXCHANGE REGISTRATION STATEMENT: As defined in Section 2(a) hereof.
HOLDER: Each registered holder of any Transfer Restricted Notes.
INDEMNIFIED PERSON: As defined in Section 7(a) hereof.
INDENTURE: The Indenture, dated as of February 5, 1998, between the
Company and Firstar Bank of Minnesota, N.A., as trustee thereunder, pursuant to
which the Notes are being issued, as amended or supplemented from time to time
in accordance with the terms thereof.
INITIAL PURCHASERS: As defined in the preamble hereof.
LIQUIDATED DAMAGES: As defined in Section 4(a) hereof.
NOTES: The 10 3/4% Senior Secured Discount Notes due 2008 of the
Company issued pursuant to the Indenture.
PARTICIPATING BROKER-DEALER: As defined in Section 2(e) hereof.
PAYING AGENT: As defined in the Indenture.
PERSON: An individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
PRIVATE EXCHANGE: As defined in Section 2(c) hereof.
PRIVATE EXCHANGE NOTES: As defined in Section 2(c) hereof.
PROCEEDING: An action, claim, suit or proceeding (including, without
limitation, an investigation or partial proceeding, such as a
deposition),whether commenced or threatened.
PROSPECTUS: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
2
<PAGE>
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated pursuant to the Securities
Act), as amended or supplemented by any prospectus supplement, with respect to
the terms of the offering of any portion of the Transfer Restricted Notes or the
Exchange Notes covered by such Registration Statement, and all other amendments
and supplements to any such prospectus, including post-effective amendments, and
all material incorporated by reference or deemed to be incorporated by
reference, if any, in such prospectus.
REGISTRATION STATEMENT: Any registration statement of the Company that
covers any of the Notes or the Exchange Notes pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference, if any, in such registration statement.
RULE 144: Rule 144 promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
RULE 144A: Rule 144A promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
RULE 158: Rule 158 promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
RULE 174: Rule 174 promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
RULE 415: Rule 415 promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
RULE 424: Rule 424 promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC as a replacement thereto having
substantially the same effect as such Rule.
SEC: The Securities and Exchange Commission.
SECURITIES ACT: The Securities Act of 1933, as amended, and the rules
and regulations promulgated by the SEC thereunder.
SHELF FILING EVENT: As defined in Section 3 hereof.
SHELF REGISTRATION: As defined in Section 3 hereof.
SHELF REGISTRATION STATEMENT: As defined in Section 3 hereof.
SPECIAL COUNSEL: Any special counsel to the Holders, the expenses of
which Holders will be reimbursed for, pursuant to Section 6.
3
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TIA: The Trust Indenture Act of 1939, as amended.
TRANSFER RESTRICTED NOTES: The Notes, upon original issuance thereof,
and at all times subsequent thereto, each Exchange Note as to which Section
3(a)(iii)(B) hereof is applicable upon original issuance and at all times
subsequent thereto and each Private Exchange Note upon original issuance thereof
and at all times subsequent thereto, until in the case of any such Note,
Exchange Note or Private Exchange Note, as the case may be, the earliest to
occur of (i) the date on which such Note has been exchanged by a person other
than a broker-dealer for an Exchange Note pursuant to the Exchange Offer, (ii) a
Registration Statement (other than, with respect to any Exchange Note as to
which Section 3(a)(iii)(B) hereof is applicable, the Exchange Registration
Statement) covering such Note, Exchange Note or such Private Exchange Note has
been declared effective by the SEC and such Note or such Private Exchange Note,
as the case may be, has been disposed of in accordance with such effective
Registration Statement, (iii) the date on which such Note, Exchange Note or
Private Exchange Note, as the case may be, is distributed to the public pursuant
to Rule 144 (or any similar provisions then in effect) or is saleable pursuant
to Rule 144(k) promulgated by the SEC pursuant to the Securities Act, or (iv)
the date on which such Note, Exchange Note or Private Exchange Note, as the case
may be, ceases to be outstanding for purposes of the Indenture.
TRUSTEE: The trustee under the Indenture and if existent, the trustee
under any indenture governing the Exchange Notes and Private Exchange Notes (if
any).
UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING: A registration in
connection with which securities of the Company are sold to an underwriter for
reoffering to the public pursuant to an effective Registration Statement.
2. EXCHANGE OFFER
(a) To the extent not prohibited by any applicable law or applicable
interpretation of the staff of the SEC, the Company shall (A) prepare and, on or
prior to 45 days after the date of this Agreement, file with the SEC a
Registration Statement relating to the Exchange Offer under the Securities Act
with respect to an offer by the Company to the Holders to issue and deliver to
such Holders, in exchange for Transfer Restricted Notes (other than Private
Exchange Notes, if any), a like principal amount of corresponding Exchange
Notes, (B) use its best efforts to cause the Registration Statement relating to
the Exchange Offer to be declared effective by the SEC under the Securities Act
on or prior to 135 days after the date of this Agreement, and (C) unless the
Exchange Offer would not then be permitted by a policy of the SEC, commence the
applicable Exchange Offer and use its best efforts to issue, on or prior to the
Consummation Date, the Exchange Notes. The offer and sale of the Exchange Notes
pursuant to the Exchange Offer shall be registered pursuant to the Securities
Act on the appropriate form (the "Exchange Registration Statement") and duly
registered or qualified under all applicable state securities or Blue Sky laws
and will comply with all applicable tender offer rules and regulations of the
Exchange Act and state securities or Blue Sky laws. The Exchange Offer and the
Private Exchange shall not be subject to any condition, other than that the
Exchange Offer and the Private Exchange, as the case may be, does not violate
any applicable law or interpretation of the staff of the SEC. Upon consummation
of the Exchange Offer in accordance with this Section 2, the provisions of this
Agreement shall continue to apply, MUTATIS MUTANDIS, solely with respect to
Transfer Restricted Notes that are Private Exchange Notes and Exchange Notes
held by Participating Broker-Dealers, and the Company shall have no further
4
<PAGE>
obligation to register Transfer Restricted Notes (other than Private Exchange
Notes and other than in respect of any Exchange Notes as to which clause
3(a)(iii)(B) hereof applies) pursuant to Section 3 hereof. No securities shall
be included in the Registration Statement covering the Exchange Offer other than
the Exchange Notes.
(b) The Company may require each Holder as a condition to its
participation in the Exchange Offer to represent to the Company and its counsel
in writing (which may be contained in the applicable letter of transmittal) that
at the time of the consummation of the Exchange Offer (i) any Exchange Notes
received by such Holder will be acquired in the ordinary course of its business,
(ii) such Holder will have no arrangement or understanding with any person to
participate in the distribution of the Notes or the Exchange Notes within the
meaning of the Securities Act and (iii) such Holder is not an Affiliate of the
Company, or if it is an Affiliate of the Company, it will comply with the
registration and prospectus delivery requirements of the Securities Act, to the
extent applicable.
(c) If, prior to consummation of the Exchange Offer, the Initial
Purchasers hold any Notes acquired by them and having, or which are reasonably
likely to be determined to have, the status of an unsold allotment in the
initial distribution, or any other Holder is not entitled to participate in the
Exchange Offer, the Company upon the request of either the Initial Purchasers or
any such Holder shall, simultaneously with the delivery of the Exchange Notes in
the Exchange Offer, issue and deliver to the Initial Purchasers and any such
Holder, in exchange (the "Private Exchange") for such Notes held by the Initial
Purchasers and any such Holder, a like principal amount at maturity of debt
securities of the Company that are identical in all material respects to the
Exchange Notes (the "Private Exchange Notes") (and which are issued pursuant to
the same indenture as the Exchange Notes). The Private Exchange Notes shall bear
the same CUSIP number as the Exchange Notes.
(d) Unless the Exchange Offer would not be permitted by any applicable
law or interpretation of the staff of the SEC, the Company shall commence the
Exchange Offer (within the time periods set forth herein) by mailing the related
exchange offer prospectus and appropriate accompanying documents, including
appropriate letters of transmittal, to each Holder providing, in addition to
such other disclosures as are required by applicable law:
(i) that the Exchange Offer is being made pursuant to this
Agreement and that all Notes validly tendered will be accepted for
exchange;
(ii) the dates of acceptance for exchange (the "Exchange Date"),
which date shall in no event be later than the Consummation Date
(unless otherwise required by applicable law);
(iii) that Holders electing to have a Note exchanged pursuant to
the Exchange Offer will be required to surrender such Note or $1,000
integral multiple portion thereof, together with the enclosed letters
of transmittal, to the institution and at the address (located in the
Borough of Manhattan, The City of New York) specified in the notice
prior to the close of business on the Exchange Date; and
(iv) that (subject to a notification pursuant to Section 3(a))
Holders that do not tender all such securities pursuant to the
Exchange Offer will no longer have any registration rights hereunder
with respect to securities not tendered.
Promptly after the Exchange Date, the Company shall:
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(i) accept for exchange all Notes or portions thereof validly
tendered and not validly withdrawn pursuant to the Exchange Offer or
the Private Exchange; and
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Notes or portions thereof so accepted for exchange by
the Company, and issue, or cause the Trustee under the Indenture to
authenticate and mail to each Holder, an Exchange Note or Private
Exchange Note, as the case may be, equal in principal amount at
maturity to the principal amount at maturity of the Notes surrendered
by such Holder.
(e) The Company and the Initial Purchasers acknowledge that the staff
of the SEC has taken the position that any broker-dealer that owns Exchange
Notes that were received by such broker-dealer for its own account in the
Exchange Offer (a "Participating Broker-Dealer") may be deemed to be an
"underwriter" within the meaning of the Securities Act and must deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resale of such Exchange Notes (other than a resale of an unsold allotment
resulting from the original offering of the Notes).
The Company and the Initial Purchasers also acknowledge that it is the
SEC staff's position that if the Prospectus contained in the Registration
Statement includes a plan of distribution containing a statement to the above
effect and the means by which Participating Broker-Dealers may resell the
Exchange Notes, without naming the Participating Broker-Dealers or specifying
the amount of Exchange Notes owned by them, such Prospectus may be delivered by
Participating Broker-Dealers to satisfy their prospectus delivery obligations
under the Securities Act in connection with resales of Exchange Notes for their
own accounts, so long as the Prospectus otherwise meets the requirements of the
Securities Act.
In light of the above, notwithstanding the other provisions of this
Agreement, the Company agrees that the provisions of this Agreement as they
relate to a Shelf Registration Statement shall also apply to an Exchange Offer
to the extent, and with such modifications thereto as may be reasonably
requested by the Initial Purchasers or by one or more Participating
Broker-Dealers, in each case as provided in clause (ii) below, as appropriate to
expedite or facilitate the disposition of any Exchange Notes by Participating
Broker-Dealers consistent with the positions of the SEC recited in this Section
2(e); provided that:
(i) the Company shall not be required to amend or supplement the
Prospectus contained in the Registration Statement, as would otherwise
be contemplated by this Agreement, for a period exceeding one year
after the Consummation Date (as such period may be extended pursuant
to the terms of this Agreement relating to a Shelf Registration) and
Participating Broker-Dealers shall not be authorized by the Company to
deliver and shall not deliver such Prospectus after such period in
connection with the resales contemplated by this Section 2(e); and
(ii) the application of the Shelf Registration procedures set
forth in Section 5 of this Agreement to an Exchange Offer, to the
extent not otherwise required by the positions of the staff of the SEC
or the Securities Act, will be in conformity with the reasonable
request to the Company by the Purchaser or by anyone that certifies to
the Company in writing that such person anticipates that it will be a
Participating Broker-Dealer; and PROVIDED, FURTHER, that in connection
with such application of the Shelf Registration procedures set forth
in Section 5 of this Agreement to an Exchange Offer, the Company shall
be obliged (x) to deal only with one entity representing the
Participating Broker-Dealers, which shall be DLJ unless it elects not
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to act as such representative, (y) to pay the fees and expenses of
only one counsel representing the Participating Broker-Dealers and (z)
to cause to be delivered, if requested, customary "cold comfort"
letters from the Company's independent accountants with respect to the
Prospectus in the form existing on the Exchange Date and with respect
to any subsequent amendment or supplement, if any, effected during the
period specified in clause (i) above.
(f) The Initial Purchasers shall have no liability to any person with
respect to any request made pursuant to Section 2(e).
(g) Interest on the Exchange Notes and the Private Exchange Notes will
accrue (by which it is meant that the Accreted Value thereof shall continue to
increase) from the date of the original issuance of the Notes.
(h) The Exchange Notes and the Private Exchange Notes may be issued
under (i) the Indenture or (ii) an indenture identical in all material respects
to the Indenture, which in either event shall provide that the Exchange Notes
shall not be subject to the transfer restrictions set forth in the Indenture.
The Indenture or such indenture shall provide that the Exchange Notes, the
Private Exchange Notes and the Notes shall vote and consent together on all
matters as one class and that neither the Exchange Notes, the Private Exchange
Notes nor the Notes will have the right to vote or consent as a separate class
on any matter.
3. SHELF REGISTRATION
(a) If (i) the Company is advised in writing by the staff of the SEC
that it is not permitted to consummate the Exchange Offer because the Exchange
Offer is not permitted by applicable law or SEC policy or (ii) the Company has
not consummated the Exchange Offer within 180 days of the date of this Agreement
or (iii) any Holder notifies the Company within 135 days after the date of this
Agreement that (A) due to a change in law or policy it is not entitled to
participate in the Exchange Offer, (B) due to a change in law or policy it may
not resell the Exchange Notes acquired by it in the Exchange Offer to the public
without delivering a prospectus and the prospectus contained in the Exchange
Offer Registration Statement is not appropriate or available for such resales by
such Holder or (C) it is a broker-dealer that owns Notes (including the
Purchaser who hold Notes as part of an unsold allotment from the original
offering of the Notes) acquired directly from the Company or an Affiliate of the
Company or (iv) any holder of Private Exchange Notes so requests within 135 days
after the consummation of the Private Exchange (each such event referred to in
clauses (i) through (iv), a "Shelf Filing Event"), the Company shall cause to be
filed with the SEC pursuant to Rule 415 a shelf registration statement (the
"Shelf Registration Statement") prior to the later of (a) 180 days after the
date of this Agreement or (b) 30 days after the occurrence of such Shelf Filing
Event, relating to all such Transfer Restricted Notes (the "Shelf Registration")
the Holders of which have provided the information required pursuant to Section
3(b) hereof; PROVIDED that if the Company has not consummated the Exchange Offer
within 180 days of the date of this Agreement, then the Company will file the
Shelf Registration Statement on or prior to the 181st day after the date of this
Agreement, and shall use its best efforts to have such Registration Statement
declared effective by the SEC as promptly as practicable, but in no event later
than on or prior to 60 days after such Shelf Registration Statement is required
to be filed. In such circumstances, the Company shall use its best efforts to
keep the Shelf Registration continuously effective under the Securities Act,
until (A) 12 months following the date of this Agreement (subject to extension
pursuant to the last paragraph of Section 5 hereof) or (B) if sooner, the date
immediately following the date that all Transfer Restricted Notes covered by the
Shelf Registration have been sold pursuant thereto (the "Effectiveness Period");
PROVIDED that the Effectiveness Period shall be extended to the extent required
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<PAGE>
to permit dealers to comply with the applicable prospectus delivery requirements
of Rule 174 and as otherwise provided herein.
(b) No Holder may include any of its Transfer Restricted Notes in any
Shelf Registration Statement pursuant to this Agreement unless and until such
Holder furnishes to the Company in writing, within 20 Business Days after
receipt of a request therefor, such information as the Company may reasonably
request for use in connection with any Shelf Registration Statement or
Prospectus or preliminary prospectus included therein. No Holder shall be
entitled to Liquidated Damages pursuant to Section 4 hereof unless and until
such Holder shall have provided all such reasonably requested information. Each
Holder as to which any Shelf Registration Statement is being effected agrees to
furnish promptly to the Company all information required to be disclosed in
order to make the information previously furnished to the Company by such Holder
not materially misleading.
4. LIQUIDATED DAMAGES
(a) The parties hereto agree that the Holders will suffer damages if
the Company fails to fulfill its obligations pursuant to Section 2 or Section 3,
as applicable, and that it would not be feasible to ascertain the extent of such
damages. Accordingly, in the event that (i) the applicable Registration
Statement is not filed with the SEC on or prior to the 45th day following the
Issue Date, (ii) the applicable Registration Statement has not been declared
effective by the SEC on or prior to the 135th day after the Issue Date, (iii)
the Exchange Offer has become effective but has not been consummated within 40
days after the date on which the Registration Statement relating to the Exchange
Offer was declared effective or (iv) the applicable Registration Statement is
filed and declared effective but shall thereafter cease to be effective without
being succeeded immediately by any additional Registration Statement covering
either the Notes or the Exchange Notes, as the case may be, which has been filed
and declared effective (each such event referred to in clauses (i) through (iv),
an "Event Date"), the Company agrees to pay, as liquidated damages, and not as a
penalty, to each Holder, an additional amount (the "Liquidated Damages") equal
to (A) during the first 90-day period beginning on, and including, the Event
Date, an amount equal to 0.5% per annum of the Accreted Value (as defined in the
Indenture) of Transfer Restricted Notes held by such Holder and (B) during each
subsequent 90-day period immediately following the final day of the prior 90-day
period, a percentage of the Accreted Value of Transfer Restricted Notes held by
such Holder calculated at the rate per annum applicable in the immediately
preceding 90-day period plus 0.5%, PROVIDED that, the rate at which Liquidated
Damages are calculated shall not exceed 2.5% per annum, and, in all cases,
ending on, but excluding (w) in the case of clause (i) above, the date on which
the applicable Registration Statement is filed, (x) in the case of clause (ii)
above, the date on which the applicable Registration Statement is declared
effective, (y) in the case of clause (iii) above, the date on which the Exchange
Offer is consummated or (z) in the case of clause (iv) above, the date on which
the applicable Registration Statement again becomes effective, as the case may
be.
(b) The Company shall notify the Trustee and Paying Agent under the
Indenture immediately upon the happening of each and every Event Date. The
Company shall pay the Liquidated Damages due on the Transfer Restricted Notes by
depositing with the Paying Agent (which shall not be the Company for these
purposes), in trust, for the benefit of the Holders thereof, at least one
Business Day prior to the applicable payment date specified in the following
sentence, sums sufficient to pay the Liquidated Damages then due. The Liquidated
Damages due shall be payable on each February 15 and August 15 to Holders of
record of Transfer Restricted Notes on the February 1 or August l, respectively,
next preceding such payment date. Each obligation to pay Liquidated Damages
shall be deemed to accrue from and including the applicable Event Date.
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(c) The parties hereto agree that the Liquidated Damages provided for
in this Section 4 constitute a reasonable estimate of the damages that will be
suffered by Holders by reason of the happening of any event described in clauses
(i) through (iv) of Section 4(a).
5. REGISTRATION PROCEDURES
In connection with the Company's registration obligations hereunder, the
Company shall effect such registrations on the appropriate form available for
the sale of the Transfer Restricted Notes or Exchange Notes, as applicable, to
(i) permit the sale of Exchange Notes and (ii) in the case of a Shelf
Registration, permit the sale of Transfer Restricted Notes in accordance with
the method or methods of disposition thereof specified by the Holders of a
majority in aggregate principal amount at maturity of Transfer Restricted Notes
to be included in the Registration Statement, and pursuant thereto the Company
shall as expeditiously as possible:
(a) In the case of a Shelf Registration, no fewer than 5 Business Days
prior to the initial filing of a Registration Statement or Prospectus and no
fewer than two Business Days prior to the filing of any amendment or supplement
thereto (including any document that would be incorporated or deemed to be
incorporated therein by reference), furnish to the Holders, their Special
Counsel and the managing underwriters, if any, copies of all such documents
proposed to be filed, which documents (other than those incorporated or deemed
to be incorporated by reference) will be subject to the review of such Holders,
their Special Counsel and such underwriters, if any, and cause the officers and
directors of the Company, counsel to the Company and independent certified
public accountants to the Company to respond to such inquiries as shall be
necessary, in the opinion of respective counsel to such Holders and such
underwriters, to conduct a reasonable investigation within the meaning of the
Securities Act; PROVIDED, HOWEVER, that the Company shall not be deemed to have
kept a Registration Statement effective during the applicable period if it
voluntarily takes or fails to take any action that results in selling Holders of
the Transfer Restricted Notes covered thereby not being able to sell such
Transfer Restricted Notes pursuant to Federal securities laws during that period
(and the time period during which such Registration Statement is required to
remain effective hereunder shall be extended by the number of days during which
such selling Holders are not able to sell Transfer Restricted Notes). The
Company shall not file any such Shelf Registration Statement or related
Prospectus or any amendments or supplements thereto which the Holders of a
majority of the Transfer Restricted Notes, their Special Counsel, or the
managing underwriters, if any, shall reasonably object on a timely basis;
(b) Prepare and file with the SEC such amendments, including
post-effective amendments, to each Registration Statement as may be necessary to
keep such Registration Statement continuously effective for the applicable time
period; cause the related Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
under the Securities Act; and comply with the provisions of the Securities Act
and the Exchange Act with respect to the disposition of all securities covered
by such Registration Statement during such period in accordance with the
intended methods of disposition by the sellers thereof set forth in such
Registration Statement as so amended or in such Prospectus as so supplemented;
(c) Notify the Holders of Transfer Restricted Notes to be sold or, in
the case of an Exchange Offer, tendered for, their Special Counsel and the
managing underwriters, if any, promptly (and in the case of an event specified
by clause (i)(A) of this paragraph in no event fewer than two Business Days
prior to such filing), and (if requested by any such Person), confirm such
notice in writing, (i)(A) when a Prospectus or any Prospectus supplement or
post-effective amendment is proposed to be filed, and, (B) with respect to a
Registration Statement or any post-effective amendment, when the same has become
effective, (ii) in the case of a Shelf Registration, of any request by the SEC
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<PAGE>
or any other Federal or state governmental authority for amendments or
supplements to a Registration Statement or related Prospectus or for additional
information, (iii) of the issuance by the SEC, any state securities commission,
any other governmental agency or any court of any stop order, order or
injunction suspending or enjoining the use or the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose,
(iv) if at any time any of the representations and warranties of the Company
contained in any agreement (including any underwriting agreement) contemplated
hereby cease to be true and correct in all material respects, (v) of the receipt
by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Transfer Restricted
Notes or Exchange Notes for sale in any jurisdiction, or the initiation or
threatening of any proceeding for such purpose, and (vi) of the happening of any
event or information becoming known that makes any statement made in such Shelf
Registration Statement or related Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in such Shelf Registration Statement,
Prospectus or documents so that, in the case of the Shelf Registration
Statement, it will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, not misleading, and that in the case of the Prospectus,
it will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading;
(d) Use its best efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of any order enjoining or suspending the use or
effectiveness of a Registration Statement or the lifting of any suspension of
the qualification (or exemption from qualification) of any of the Transfer
Restricted Notes or Exchange Notes for sale in any jurisdiction, at the earliest
practicable moment;
(e) If a Shelf Registration is filed pursuant to Section 3 hereof and
if requested by the managing underwriters, if any, or the Holders of a majority
in aggregate principal amount at maturity of the Transfer Restricted Notes being
sold in connection with such offering, (i) promptly incorporate in a Prospectus
supplement or post-effective amendment such information as the managing
underwriters, if any, and such Holders agree should be included therein, and
(ii) make all required filings of such Prospectus supplement or such
post-effective amendment as soon as practicable after the Company has received
notification of the matters to be incorporated in such Prospectus supplement or
post-effective amendment; PROVIDED, HOWEVER, that the Company shall not be
required to take any action pursuant to this Section 5(e) that would, in the
opinion of counsel for the Company, violate applicable law;
(f) Furnish to each Holder, their Special Counsel and each managing
underwriter, if any, without charge, at least one conformed copy of each
Registration Statement and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference, and all exhibits to the extent requested by
each Holder (including those previously furnished or incorporated by reference)
as soon as practicable after the filing of such documents with the SEC;
(g) Deliver to each Holder, their Special Counsel, and the
underwriters, if any, without charge, as many copies of the Prospectus or
Prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Persons reasonably request; and the Company hereby
consents to the use of such Prospectus and each amendment or supplement thereto
by each of the selling Holders and the underwriters, if any, in connection with
the offering and sale of the Transfer Restricted Notes covered by such
Prospectus and any amendment or supplement thereto;
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(h) Prior to any public offering of Transfer Restricted Notes and
prior to the consummation of the Exchange Offer, use its best efforts to
register or qualify or cooperate with the Holders of Transfer Restricted Notes
to be sold or tendered for, the underwriters, if any, and their respective
counsel in connection with the registration or qualification (or exemption from
such registration or qualification) of such Transfer Restricted Notes or
Exchange Notes for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder or underwriter reasonably
requests in writing; keep each such registration or qualification (or exemption
therefrom) effective during the period such Registration Statement is required
to be kept effective and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Transfer
Restricted Notes or Exchange Notes covered by the applicable Registration
Statement;
(i) In connection with any sale or transfer of Transfer Restricted
Notes that will result in such securities no longer being Transfer Restricted
Notes, cooperate with the Holders and the managing underwriters, if any, to
facilitate the timely preparation and delivery of certificates representing
Transfer Restricted Notes or Exchange Notes to be sold, which certificates shall
not bear any restrictive legends and shall be in a form eligible for deposit
with The Depository Trust Company and to enable such Transfer Restricted Notes
or Exchange Notes to be in such denominations and registered in such names as
the managing underwriters, if any, or Holders may request at least two Business
Days prior to any sale of Transfer Restricted Notes or Exchange Notes;
(j) Use its best efforts to cause the offering of the Transfer
Restricted Notes and Exchange Notes covered by the Registration Statement to be
registered with or approved by such other governmental agencies or authorities
as may be necessary to enable the seller or sellers thereof or the underwriters,
if any, to consummate the disposition of such Transfer Restricted Notes and
Exchange Notes, except as may be required solely as a consequence of the nature
of such selling Holder's business, in which case the Company will cooperate in
all reasonable respects with the filing of such Registration Statement and the
granting of such approvals;
(k) Upon the occurrence of any event contemplated by Paragraph
5(c)(vi), as promptly as practicable, prepare a supplement or amendment,
including, if appropriate, a post-effective amendment, to each Registration
Statement or a supplement to the related Prospectus or any document incorporated
or deemed to be incorporated therein by reference, and file any other required
document so that, as thereafter delivered, such Prospectus will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(l) Prior to the effective date of the first Registration Statement
relating to the Transfer Restricted Notes or Exchange Notes, as applicable, to
provide a CUSIP number for the Transfer Restricted Notes and Exchange Notes, as
applicable;
(m) If a Shelf Registration is filed pursuant to Section 3 hereof,
enter into such agreements (including an underwriting agreement in form, scope
and substance as is customary in underwritten offerings) and take all such other
reasonable actions in connection therewith (including those reasonably requested
by the managing underwriters, if any, or the Holders of a majority in aggregate
principal amount at maturity of the Transfer Restricted Notes being sold) in
order to expedite or facilitate the disposition of such Transfer Restricted
Notes, and in such connection, whether or not an underwriting agreement is
entered into and whether or not the registration is an underwritten
registration, (i) make such representations and warranties to the Holders of
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<PAGE>
such Transfer Restricted Notes and the underwriters, if any, with respect to the
business of the Company and its subsidiaries (including with respect to
businesses or assets acquired or to be acquired by any of them), and the
Registration Statement, Prospectus and documents, if any, incorporated or deemed
to be incorporated by reference therein, in each case, in form, substance and
scope as are reasonable and customarily made by issuers to underwriters in
underwritten offerings, and confirm the same if and when requested; (ii) obtain
an opinion of counsel to the Company and updates thereof (which counsel and
opinions (in form, scope and substance) shall be reasonably satisfactory to the
managing underwriters, if any, and Special Counsel to the Holders) addressed to
each selling Holder and each of the underwriters, if any, covering the matters
customarily covered in opinions requested in underwritten offerings and such
other matters as may be reasonably requested by such Special Counsel and
underwriters; (iii) use its best efforts to obtain customary "cold comfort"
letters and updates thereof from the independent certified public accountants of
the Company (and, if necessary, any other independent certified public
accountants of any subsidiary of the Company or of any business acquired by the
Company for which financial statements and financial data is, or is required to
be, included in the Registration Statement), addressed (where reasonably
possible) to each selling Holder and each of the underwriters, if any, such
letters to be in customary form and covering matters of the type customarily
covered in "cold comfort" letters in connection with underwritten offerings;
(iv) if an underwriting agreement is entered into, the same shall contain
indemnification provisions and procedures no less favorable to the selling
Holders and the underwriters, if any, than those set forth in Section 8 hereof
(or such other provisions and procedures acceptable to Holders of a majority in
aggregate principal amount of the Transfer Restricted Notes covered by such
Registration Statement and the managing underwriters, if any); and (v) deliver
such documents and certificates as may be reasonably requested by the Holders of
a majority in aggregate principal amount at maturity of the Transfer Restricted
Notes being sold, their Special Counsel and the managing underwriters, if any,
to evidence the continued validity of the representations and warranties made
pursuant to clause (i) above and to evidence compliance with any customary
conditions contained in the underwriting agreement or other agreement entered
into by the Company;
(n) In the case of a Shelf Registration, make available for inspection
by a representative of the Holders of Transfer Restricted Notes being sold, any
underwriter participating in any such disposition of Transfer Restricted Notes,
if any, and any attorney, consultant or accountant retained by such selling
Holders or underwriter, at the offices where normally kept, during reasonable
business hours, all financial and other records, pertinent corporate documents
and properties of the Company and its subsidiaries (including with respect to
business and assets acquired or to be acquired to the extent that such
information is available to the Company), and cause the officers, directors,
agents and employees of the Company and its subsidiaries (including with respect
to business and assets acquired or to be acquired to the extent that such
information is available to the Company) to supply all information in each case
reasonably requested by any such representative, underwriter, attorney,
consultant or accountant in connection with such Shelf Registration; PROVIDED,
HOWEVER, that such Persons shall first agree in writing with the Company that
any information that is reasonably and in good faith designated by the Company
in writing as confidential at the time of delivery of such information shall be
kept confidential by such Persons, unless (i) disclosure of such information is
required by court or administrative order or is necessary to respond to
inquiries of regulatory authorities, (ii) disclosure of such information is
required by law (including any disclosure requirements pursuant to Federal
securities laws in connection with the filing of any Registration Statement or
the use of any prospectus referred to in this Agreement), (iii) such information
becomes generally available to the public other than as a result of a disclosure
or failure to safeguard by such Person or (iv) such information becomes
available to such Person from a source other than the Company and such source is
not bound by a confidentiality agreement;
(o) Provide an indenture trustee for the Transfer Restricted Notes and
the Exchange Notes, as the case may be, and cause the Indenture to be qualified
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<PAGE>
under the TIA not later than the effective date of the first Registration
Statement relating to the Transfer Restricted Notes or the Exchange Notes, as
applicable; and in connection therewith, cooperate with the trustee under the
Indenture and the Holders, to effect such changes to the Indenture as may be
required for such Indenture to be so qualified in accordance with the terms of
the TIA; and execute, and use its best efforts to cause such trustee to execute,
all customary documents as may be required to effect such changes, and all other
forms and documents required to be filed with the SEC to enable the Indenture to
be so qualified in a timely manner;
(p) Comply with all applicable rules and regulations of the SEC and
make generally available to their security holders earning statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act), no later than 45
days after the end of any 12-month period (or 90 days after the end of any
12-month period if such period is a fiscal year) (i) commencing at the end of
any fiscal quarter in which Transfer Restricted Notes are sold to underwriters
in a firm commitment or reasonable efforts underwritten offering and (ii) if not
sold to underwriters in such an offering, commencing on the first day of the
first fiscal quarter after the effective date of a Registration Statement, which
statement shall cover said period, consistent with the requirements of Rule 158;
(q) In the case of a Shelf Registration, use its best efforts to cause
the Transfer Restricted Notes to be rated with the appropriate rating agencies,
if so requested by the managing underwriters, if any, or the Holders of a
majority in aggregate principal amount at maturity of the Transfer Restricted
Notes;
(r) Cooperate with each seller of Transfer Restricted Notes covered by
any Registration Statement and each underwriter, if any, participating in the
disposition of such Transfer Restricted Notes and their respective counsel in
connection with any filings required to be made with the National Association of
Securities Dealers, Inc.;
(s) Use its best efforts to take all other steps necessary or
advisable to effect the registration of the Exchange Notes and/or Transfer
Restricted Notes covered by a Registration Statement contemplated hereby; and
(t) If an Exchange Offer is to be consummated, upon delivery of the
Transfer Restricted Notes by such Holders to the Company in exchange for the
Exchange Notes, the Company shall mark, or caused to be marked, on such Transfer
Restricted Notes that such Transfer Restricted Notes are being cancelled in
exchange for the Exchange Notes; in no event shall such Transfer Restricted
Notes be marked as paid or otherwise satisfied.
The Company may require such seller of Transfer Restricted Notes as to
which any registration is being effected to furnish to the Company such
information regarding the distribution of such Transfer Restricted Notes as is
required by law to be disclosed in the applicable Registration Statement and the
Company may exclude from such registration the Transfer Restricted Notes of any
seller who fails to furnish such information within a reasonable time after
receiving such request.
If any such Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder shall
have the right to require (i) the insertion therein of language, in form and
substance reasonably satisfactory to such Holder, to the effect that the holding
by such Holder of such securities is not to be construed as a recommendation by
such Holder of the investment quality of the Company's securities covered
thereby and that such holding does not imply that such Holder will assist in
meeting any future financial requirements of the Company, or (ii) in the event
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<PAGE>
that such reference to such Holder by name or otherwise is not required by the
Securities Act or any similar Federal statute then in force, the deletion of the
reference to such Holder in any amendment or supplement to the Registration
Statement filed or prepared subsequent to the time that such reference ceases to
be required.
In the case of a Shelf Registration pursuant to Section 3 hereof, each
Holder agrees by acquisition of such Transfer Restricted Notes that, upon
receipt of any notice from the Company of the happening of any event of the kind
described in Section 5(c)(ii), 5(c)(iii), 5(c)(v) or 5(c)(vi) hereof, such
Holder will forthwith discontinue disposition of such Transfer Restricted Notes
covered by such Registration Statement or Prospectus until such Holder's receipt
of the copies of the supplemented or amended Prospectus contemplated by Section
5(k) hereof, or until it is advised in writing (the "Advice") by the Company
that the use of the applicable Prospectus may be resumed, and, in either case,
has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus. If
the Company shall give any such notice, the Effectiveness Period shall be
extended by the number of days during such period from and including the date of
the giving of such notice to and including the date when each seller of Transfer
Restricted Notes covered by such Registration Statement shall have received (x)
the copies of the supplemented or amended Prospectus contemplated by Section
5(k) hereof or (y) the Advice, and, in either case, has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus.
6. REGISTRATION EXPENSES
(a) All fees and expenses incident to the performance of or compliance
with this Agreement by the Company shall be borne by the Company whether or not
any Registration Statement is filed or becomes effective and whether or not any
securities are issued or sold pursuant to any Registration Statement. The fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with the
National Association of Securities Dealers, Inc. and (B) in compliance with
securities or Blue Sky laws (including, without limitation and in addition to
that provided for in (b) below, fees and disbursements of counsel for the
underwriters or Holders or holders of Exchange Notes in connection with Blue Sky
qualifications and determination of the eligibility of the Transfer Restricted
Notes or Exchange Notes for investment under the laws of such jurisdictions as
the managing underwriters, if any, or Holders of a majority in aggregate
principal amount at maturity of Transfer Restricted Notes may designate), (ii)
printing expenses (including, without limitation, expenses of printing
certificates for Transfer Restricted Notes or Exchange Notes in a form eligible
for deposit with The Depository Trust Company and of printing Prospectuses if
the printing of Prospectuses is required by the managing underwriters, if any,
or by the Holders of a majority in principal amount at maturity of the Transfer
Restricted Notes included in or tendered for in connection with any Registration
Statement), (iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Company and Special Counsel for the Holders
(plus any local counsel, deemed appropriate by the Holders of a majority in
aggregate principal amount at maturity of the Transfer Restricted Notes), in
accordance with the provisions of Section 6(b) hereof, (v) fees and
disbursements of all independent certified public accountants referred to in
Section 5(m)(iii) hereof (including, without limitation, the expenses of any
special audit and "cold comfort" letters required by or incident to such
performance), (vi) if required, the fees and expenses of any "qualified
independent underwriter" and its counsel, (vii) Securities Act liability
insurance, if the Company desires such insurance, and (viii) fees and expenses
of all other persons retained by the Company. In addition, the Company shall pay
their internal expenses (including, without limitation, all salaries and
expenses of their officers and employees performing legal or accounting duties),
the expense of any annual audit, and the fees and expenses incurred in
connection with the listing of the securities to be registered on any securities
exchange.
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(b) In connection with any registration hereunder, the Company shall
reimburse the Holders of the Transfer Restricted Notes being registered or
tendered for in such registration for the reasonable fees and disbursements of
not more than one firm of attorneys representing the selling Holders (in
addition to any local counsel) chosen by the Holders of a majority in aggregate
principal amount at maturity of the Transfer Restricted Notes.
7. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless (i) each Initial
Purchaser, each Holder, each holder of Exchange Notes and each Participating
Broker-Dealer, (ii) each person, if any, who controls (within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act) any of the foregoing
(any of the persons referred to in this clause (ii) being hereinafter referred
to as a "controlling person"), and (iii) the respective officers, directors,
partners, employees, representatives and agents of the Initial Purchaser, each
Holder, each holder of Exchange Notes, each Participating Broker-Dealer or any
controlling person (any person referred to in clause (i), (ii) or (iii) may
hereinafter be referred to as an "Indemnified Person"), from and against any and
all losses, claims, damages, liabilities and judgments caused by any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement, Prospectus or form of Prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or caused by any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein (in the case of any
Prospectus or form of Prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading, except insofar as such
losses, claims, damages, liabilities or judgments are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Indemnified Person furnished in writing to the
Company by such Indemnified Person expressly for use therein; PROVIDED that the
foregoing indemnity with respect to any preliminary prospectus shall not inure
to the benefit of any Indemnified Person from whom the person asserting such
losses, claims, damages, liabilities and judgments purchased securities if such
untrue statement or omission or alleged untrue statement or omission made in
such preliminary prospectus is eliminated or remedied in the Prospectus and a
copy of the Prospectus shall not have been furnished to such person in a timely
manner due to the wrongful action or wrongful inaction of such Indemnified
Person.
(b) In case any action shall be brought against any Indemnified
Person, based upon any Registration Statement or any such Prospectus or any
amendment or supplement thereto and with respect to which indemnity may be
sought against the Company, such Indemnified Person shall promptly notify the
Company in writing and the Company shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to such Indemnified Person and
payment of all fees and expenses. Any Indemnified Person shall have the right to
employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person, unless (i) the employment of such counsel shall have
been specifically authorized in writing by the Company, (ii) the Company shall
have failed to assume the defense and employ counsel or (iii) the named parties
to any such action (including any impleaded parties) include both such
Indemnified Person and the Company and such Indemnified Person shall have been
advised by counsel that there may be one or more legal defenses available to it
which are different from or additional to those available to the Company (in
which case the Company shall not have the right to assume the defense of such
action on behalf of such Indemnified Person, it being understood, however, that
the Company shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable fees
and expenses of more than one separate firm of attorneys (in addition to any
local counsel) for all such Indemnified Persons, which firm shall be designated
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in writing by such Indemnified Persons, and that all such fees and expenses
shall be reimbursed as they are incurred). The Company shall not be liable for
any settlement of any such action effected without its written consent but if
settled with its written consent, the Company agrees to indemnify and hold
harmless any Indemnified Person from and against any loss or liability by reason
of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.
(c) In connection with any Registration Statement in which a Holder is
participating, such Holder agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers and any person
controlling the Company within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act, to the same extent as the foregoing indemnity
from the Company to each Indemnified Person but only with respect to information
relating to such Indemnified Person furnished in writing by or on behalf of such
Indemnified Person expressly for use in such Registration Statement. In any such
case in which any action shall be brought against the Company, any of its
directors, any such officer or any person controlling the Company based on such
Registration Statement and in respect of which indemnity may be sought against
any Indemnified Person, the Indemnified Person shall have the rights and duties
given to the Company (except that if the Company shall have assumed the defense
thereof, such Indemnified Person shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such Indemnified Person),
and the Company, its directors, any such officers and any person controlling the
Company shall have the rights and duties given to the Indemnified Person, by
Section 7(b) hereof.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then the indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and each
Indemnified Person on the other hand from the offering of the Notes or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and each such Indemnified Person on the other hand in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and each such
Indemnified Person on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by the
Company or such Indemnified Person and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Initial Purchasers agree that it would not be just
and equitable if contribution pursuant to this Section 7(d) were determined by
PRO RATA allocation (even if the Indemnified Person were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
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party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, no Indemnified Person shall be
required to contribute any amount in excess of the amount by which the net
profit received by it in connection with the sale of the Notes contemplated by
this Agreement exceeds the amount of any damages which such Indemnified Person
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section II (f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Indemnified Persons' obligations to contribute pursuant
to this Section 7(d) are several in proportion to the respective amount of Notes
included in any such Registration Statement by each Indemnified Person and not
joint.
8. RULES 144 AND 144A
The Company shall use its best efforts to file the reports required to
be filed by it under the Securities Act and the Exchange Act in a timely manner
and, if at any time it is not required to file such reports but in the past had
been required to or did file such reports, it will, upon the request of any
Holder, make available other information as required by, and so long as
necessary to permit, sales of its Transfer Restricted Notes pursuant to Rule
144A. Notwithstanding the foregoing, nothing in this Section 8 shall be deemed
to require the Company to register any of its securities pursuant to the
Exchange Act.
9. UNDERWRITTEN REGISTRATIONS
If any of the Transfer Restricted Notes covered by any Shelf
Registration are to be sold in an underwritten offering, the investment banker
or investment bankers and manager or managers that will administer the offering
will be selected by the Holders of a majority in aggregate principal amount at
maturity of such Transfer Restricted Notes included in such offering, subject to
the consent of the Company (which will not be unreasonably withheld or delayed).
No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such Transfer Restricted Notes on the
basis reasonably provided in any underwriting arrangements approved by the
persons entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements.
10. MISCELLANEOUS
(a) REMEDIES. In the event of a breach by the Company or by a Holder
of any of their obligations under this Agreement, each Holder or the Company, as
the case may be, in addition to being entitled to exercise all rights granted by
law, including recovery of damages, will be entitled to specific performance of
its rights under this Agreement. Subject to Section 4 hereof, the Company and
each Holder agree that monetary damages would not be adequate compensation for
any loss incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
(b) NO INCONSISTENT AGREEMENTS. The Company will not enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof. The Company has not previously entered into any agreement,
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which is now effective, granting any registration rights with respect to any of
its debt securities to any person. Without limiting the generality of the
foregoing, without the written consent of the Holders of a majority in aggregate
principal amount at maturity of the then outstanding Transfer Restricted Notes,
the Company shall not grant to any person the right to request the Company to
register any of their debt securities under the Securities Act unless the rights
so granted are subject in all respects to the prior rights of the Holders set
forth herein, and are not otherwise in conflict or inconsistent with the
provisions of this Agreement.
(c) NO PIGGYBACK ON REGISTRATIONS. The Company shall not grant to any
of its security holders (other than the Holders in such capacity) the right to
include any securities of the Company in any Shelf Registration or Exchange
Offer other than Transfer Restricted Notes.
(d) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, otherwise than with the prior written consent of the Holders
of not less than a majority of the then outstanding aggregate principal amount
at maturity of Transfer Restricted Notes; PROVIDED, HOWEVER, that, for the
purposes of this Agreement, Transfer Restricted Notes that are owned, directly
or indirectly, by the Company or an Affiliate of the Company are deemed not
outstanding. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders whose securities are being sold pursuant to a Registration
Statement and that does not directly or indirectly affect the rights of other
Holders may be given by Holders of a majority in aggregate principal amount at
maturity of the Transfer Restricted Notes being sold by such Holders pursuant to
such Registration Statement; PROVIDED, HOWEVER, that the provisions of this
sentence may not be amended, modified or supplemented except in accordance with
the provisions of the immediately preceding sentence.
(e) NOTICES. All notices and other communications provided for herein
shall be made in writing by hand-delivery, next-day air courier, certified
first-class mail, return receipt requested, telex or facsimile:
(i) if to the Company, as provided in the Purchase Agreement,
(ii) if to the Initial Purchasers, as provided in the Purchase
Agreement, or
(iii) if to any other person who is then a registered Holder, to
the address of such Holder as it appears in the Note register of the
Company.
Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given: when delivered by hand,
if personally delivered; one business day after being timely delivered to a
next-day air courier; five business days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; and when receipt is
acknowledged by the recipient's telecopier machine, if telecopied.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of each of the
parties and shall inure to the benefit of each Holder. The Company may not
assign its rights or obligations hereunder without the prior written consent of
each Holder. Notwithstanding the foregoing, no transferee shall have any of the
rights granted under this Agreement until such transferee shall acknowledge its
rights and obligations hereunder by a signed written statement of such
transferee's acceptance of such rights and obligations.
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(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and, all of which taken
together shall constitute one and the same Agreement.
(h) APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS
MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK, EXCLUDING (TO THE
GREATEST EXTENT PERMISSIBLE BY LAW) ANY RULE OF LAW THAT WOULD CAUSE THE
APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY NEW
YORK STATE COURT SITTING IN THE BOROUGH OF MANHAT TAN IN THE CITY OF NEW YORK OR
ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN
RESPECT OF ANY SUIT, ACTION OR PROCEED ING RELATED TO THIS AGREEMENT OR ANY OF
THE MATTERS CONTEMPLATED HEREBY, IRREVOCABLY WAIVES ANY DEFENSE OF LACK OF
PERSONAL JURISDICTION AND IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY
SUIT, ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. THE
COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF
VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY
CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
(i) SEVERABILITY. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(j) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof. All
references made in this Agreement to "Section" and "paragraph" refer to such
Section or paragraph of this Agreement, unless expressly stated otherwise.
(k) ATTORNEYS' FEES. In any action or proceeding brought to enforce
any provisions of this Agreement, or where any provision hereof or thereof is
validly asserted as a defense, the prevailing party, as determined by the court,
shall be entitled to recover reasonable attorneys' fees in addition to any other
available remedy.
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IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of the date first written above.
UNITED INTERNATIONAL HOLDINGS, INC.
By: /s/ J. Timothy Bryan
------------------------------------------
Name:
Title:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
MORGAN STANLEY DEAN WITTER
TD SECURITIES (USA) INC.
By: DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ David F. Posnick
--------------------------------------
Name:
Title:
20
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report, included in this Form 8-K, into previously filed
Registration Statement File Nos. 333-47245, 33-87326, 333-00226, and 33-81876.
ARTHUR ANDERSEN LLP
Denver, Colorado
March 9, 1998
